Press translations [Japan]. Economic Series 0257, 1946-02-04.

Extracts:

First, let me explain the problems connected with banking organizations. Such organizations are anything from large banks with huge capital to small pawn shops. I would like to point out that such organizations should return to their respective original status, to meet the new situation when the economy of JAPAN is to be reestablished. Some of them will become more important while some will become less so, according to the development of the future economic situation. In either case, they should undertake vigorous measures to readjust their aims. It is clear that the mission entrusted to these organization during the war has been finished.

Excluding the frozen organizations, banking organizations for agriculture, fishery, and labor or co-operative unions, are assumed to have been entrusted with a new and important mission, founded on an entirely new ideal. Special banks or large capitalized banks which have played an important role in the finances of JAPAN should be reorganized or improved. The Bank of JAPAN, the Industrial Bank of JAPAN, and the Hypothec Bank of JAPAN are to be included in this category. Banks established by the Zaibatsu will not be exempted. No hesitation in the reorganization and renovation of such organizations should be permitted.

The Bank of JAPAN is the only bank which issues bank note, and enjoys the status of being the bank for banks and is also the central bank dominating the financial circle. As long as it leads the financial circle as a unique central bank of the state, its business policy must be fundamentally amended. Nevertheless, how slow it is in starting amendment! The most lamentable defect in every field in JAPAN is the fact that people are too much influenced by a yoke of formality and regulation. In such circumstances the organizations must move simultaneously with the enactment of amendments of regulations or ordinances However, the Bank of JAPAN, which has an important role in the finances of the State, has done nothing worth while in this line during the last six months, While JAPAN is said to be on the verge of collapse as a result of the inflation, what steps has it token? It is a matter for regret that even this bank is being affected by the inflation. The economic activities by the Law of the Bank of JAPAN in l94l, and which has been discharging its entrusted mission during these years of war, should strike out its war time characteristics and start again as on entirely different central bank to meet a new situation.

After the end of the first European War the people demanded that the central banks be less subject to State control. A similar demand may be made of the Bank of JAPAN a t present. How should it be reorganized? I have not enough space to explain this fully but the present system of the Federated Reserve Banks in the UNITED STATES is a good example.

POITICAL SERIES: 257 (Continued)

ITEM 1 (Continued)

Of course, the entire banking system of the UNITED STATES can not he adopted for the monopolistic banking system of JAPAN, but its status, structure and business policy will serve as a good example. What I want to suggest are (l) the Bank, after being freed from State control, should resume its former original mission, (2) in order to enhance its relationship with ordinary banks, the capital of the Bank of JAPAN should consist of capital offered by ordinary banks; it should be a member of the union of ordinary banks, (3) the board of directors should consist of representatives of banking and industrial circles, by wiping out the present bureaucratic elements, and (4) its business policy should be altered so that it may take its initiative in leading and controlling the distribution of currency and the readjustment of finances. The system of issuing Bank of JAPAN notes deserves the closest investigation. Similar measures also expected to be taken by other banks, so that they may contribute toward promoting the welfare and interest of the nation.

The Industrial Bank of JAPAN and the Hypothec Bank of JAPAN are not to be excluded from this category. Those banks whose business transactions are suspended because their assets are in foreign territories, or because of the part they played a part in the war will do well to take similar steps when permitted. Such ordinary banks as the TEIKOKU MITSUBISHI SUMITOMO and YASUDA require thorough consideration. It is needless to say that these banks, which contributed toward the establishment, of the present day Zaibatsu by enlarging the industrial capital of various corporations under the jurisdiction of the Zaibatsu, and which made themselves large barking organizations through these acts, are also requested to make a new start as people's banking organizations.

Full Translation:

The War-Damage Restoration Board (SENSAI FUKKO), foreseeing the completion of 300,000 homes by the end of March under the project started last year, has decided upon 500,000 homes as its next project. Various measures are being suggested for speeding up the project. The essential points of this program are as follows:

• (1).For last years' project, the government subsidized the building of homes for rent and encouraged people to build them themselves. The number built in this manner amounted to only 20,000; but under the new project, as many homes for rent as possible are desired since the majority of the homeless people lack the ability to build homes themselves.
• (2).Hereafter the forming of home-rental associations will be supported. For homes within these associations, privileges such as property tax exemptions are being planned.

Summary:

The Government Railway has revealed its plan to raise fares by 25 per cent beginning on 1 March. It is expected that all the private railways as well as the TOKYO Metropolitan Tram-cars will follow this example.

Subway passengers were much confused on 1 February by a sudden rise in fare from 20 sen to 30 sen. It is a matter of course that a rise in fares over such a wide range aroused strong apposition among the

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POLITICAL SERIES: 257 (Continued)

ITEM 3 (Continued)

mass of the people to whom transportation forms a part of their livelihood, just as much as food, clothing, and housing.

In this connection, Mr. KUDO, Chief of the Price Bureau of the Ministry of Finance, expressed his views as follows:

"The Finance Ministry has not as yet been notified of the rise in the subway fare, though an increase in fare, even of snail local rail - ways, is usually published without fail before it is put into effect, as it has a great influence on the national livelihood. However, it will eventually be permitted if patterned after that of the Government Railways. Private railways running parallel to the Government Railways have been permitted to raise fares in proportion to those of the Government Railways in order to prevent passengers from rushing upon cheaper lines in excessively large numbers.

The new rise in the subway fares may be caused by the wage increase of the employees. At any rate the coming higher fares of Government Railways were decided on in strict conformity with a commodity price program which is now under the Government's consideration. Having been decided upon, and made public by the Freight Deliberating Commission (UNCHIN SHINGI KAl), it may he beyond recall even if opposed on many sides.

"Due measures will be taken shortly for minimizing possible had influences on the general public. The Government is now planning measures for protecting wage earners from abnormally high prices. A price ceiling to eliminate the difference between official prices and black market ones is also under consideration."

Mr. NISHIO of the Central Executive Committee of the Social Democratic Party, explained the attitude of the Party to the Government Railway's fare increase as follows:

"Representatives of the Party will shortly meet the authorities of the Finance and the Transportation Ministries to ask their frank opinions on the matter. According to the representatives' reports, the Party will discuss the matter and decide it s attitude towards it."

Mr. YAMAZAKI of the Employees Union of the TOKYO Express Electric Railway (TOKYO KYUKO DENTESU JUGO IN KUMIAI) said as follows:

"Improvement of the treatment of employees ho raising fares is against the principle of democracy as it means benefit to employees alone at the cost of the mass of the people. There are many other ways to cover the increased expenditure due to the wage increase. The management intends to shift responsibility for public opposition on the employees' shoulders."

The Communist Party's view are represented by Mr. ONUMA as follows:

"From labor's point of view, we absolutely oppose such a big rise in fares. Transport expenses, which are in reality the same as taxes, must not be raised at the option of the Transportation Ministry or private railway companies. Reforms must be made so that fares cannot be raised without the approval of the Diet. To meet the demands of employees for better treatment, the Government Railway has an increased expenditure of nearly 20 billion yen, It is evident that such a big increase in expenditure cannot be covered by an increase of fares and freight charges alone, We insist that revenue from taxes such as the Property Tax and the Wartime Profits Tax should be appropriated to cover it. Metropolitan Tram-cars and private railways should make good the deficiency due to wage increases by Government subsidies."

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