Press translations [Japan]. Economic Series 0028, 1945-11-30.

Summary:

In the presence of Transportation Parliamentary Vice-Minister ARAI, and prefectural officials and civilians, there was a roundtable discussion at which the plan for the NARUTO Tunnel, which joins SKIKOKU with AWAJI-SHIMA and HONSHU, was clarified.

Before the war this plan had once been made for the purpose of cargo transport and also because there is a beautiful natural scenic zone bordering the SETO Inland Sea, AWAJI-SHIMA and SHIKOKU. But during the war it did not materialize because a fortified town, YURA, was located in that vicinity.

Now, with the war over, this NARUTO undersea tunnel plan has become possible. There will be a great increase in the number of foreign visitors to JAPAN in the future, and they would spend time freely in those scenic spots, according to ARAI's talk. Consequently, for us to have such an installation for the visitors' convenience will reduce our burden of war reparations, more or less, and also may show that our nation is peace loving.

This problem seems to call for much Governmental attention, and it is likely that this zone will be named one of JAPAN's national parks.

There are two plans, both of which start from AKASHI, dive into the sea to the northern cape of AWAJI-SHIMA, IWATA, covering 16.2 kilometers, and lead to FUKURA via SUMOTO. One creeps seaward again to MUYA from FUKURA, and the other goes to AMA farther from FUKURA and joins MUYA. The distance undersea is 7.5 kilometers between FUKURA and MUYA and 13.7 kilometers between AMA and MUYA. Which of the two ways will be adopted depends on further deliberation.

Expenditures for this work were estimated at 100,000,000 yen in prewar times.

Full translation:

Although there is the proverb, "Wheat can grow anywhere if you have fertilizer, but rice needs fertile soil," a teacher and farmer, Mr. MATSUURA, has invented a new plan, contrary to the idea expressed in the saying, for growing wheat without fertilizer.

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ITEM 2 (Continued)

This new idea is that we can expect a good harvest of wheat without fertilizer in MANCHURIA, because wheat can supply itself with nourishment contained in the water under the earth. There are similar conditions in JAPAN where it is damp in early spring. He has experimented on this idea with a specimen of wheat in the ground in front of his school, and has said, "Even though the weather is warmer and the ground wetter in JAPAN, this try may be unsuitable, but every little bit of fertilizer must be spared because of its present shortage. I have studied soil, irrigation and capillarity, and I think this idea has definite merit. Right now I an experimenting with the MANCHURIAN method of growing wheat by which wheat can absorb fertilizer deep in the earth, and I hope the results will be satisfactory."

ITEM 3 Democratic Understanding of Inflation Problem (Second of the Series) Signed Article of KIMURA, Kihachiro - Tokyo Shimbun - 24 Nov 45. Translator: M. Maruyama.

Summary:

Under wartime control, goods found their way illegally into military and Government quarters as well as various control organizations and street associations. Goods also were hoarded by wealthy men who bought them at black market prices. Naturally, the general public was never able to get enough goods. When the control is removed, goods are freely placed on the market, but due to abnormally high prices, people cannot afford to buy then as they wish. While they are standing before the goods, which they wanted to buy and are hesitating whether to buy or not, men who have much money come around and buy them at high prices.

Many people now have quite a bit of money which they received on being discharged from the munitions companies, following the termination of the war. For one or two months after their retirement they can buy even high priced goods and may believe that free economy is convenient to them at least as far as they can get what they want. However, here lurks a danger. These people are likely to spend all of their money by the end of this year in buying food and other daily necessities. After that they will not be able to buy them even though goods are amply supplied to the market. Exit the poor public; enter rich men. With plenty of money rich people con buy plenty of goods.

This is the really merciless phase of pure inflation. The Government is understood to be taking steps which will cause pure inflation in this way. If so, the Government is going to give freedom of starvation to the public under the fair name of democracy while the people are trying; hard to defend themselves economically against starvation. From an economic viewpoint, a state of anarchy now prevails in JAPAN. Is democracy really such a thing?

Objectively, the attitude of the Government in trying to shift the sacrifices of inflation to the public and to secure the freedom of starvation for the public is insincere indeed, though subjectively it may seem sincere. For example, Finance Minister SHIBUSAWA is reported to have told the Supreme Command of the Allied Powers that 10,000,000 Japanese may die from starvation. What then, does this insincerity arise from? Bluntly speaking, it comes from the fear

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of the severity of postwar inflation on the part of the capitalists, landlords and other moneyed classes whom the present government represents. Does the Government think production will be restored to its prewar status if free economy is enforced, and thus the crisis of inflation is tided over? The public, however, should be careful not to let itself be deluded into thinking that Government authorities understand the situation in such a way.

The Japanese nation once firmly believed that the Government would never start a war which might bring ruin to their country and that it would surely have some good ideas and devices to lead the war to victory. The result, however, has been just the opposite of that. The brains of Government leaders who represent capitalists and landlords are poorer than estimated by the public.

Now, let us see how severe and wide the present inflation in this country is. There are two important objective factors which have led the postwar inflation to its present severity rarely seen in world history of inflation. One is a wartime inflation which had sowed the seeds of postwar inflation, and the other is the absolute shortage of food. The wartime inflation in this country was so severe that immediately following the termination of the war it reached the same stage as that in GERMANY several months after the end of World War I when inflation went beyond, human control. During most of World War I GERMANY experienced no inflation to speak of, but in JAPAN the inflation was nearing a critical stage during wartime, as former Finance Minister HIROSE pointed out. Worse still is the fact that an enormous amount of debts totaling a thousand billion yen contracted during wartime has been brought over to the postwar era and that the heavy debts threaten to aggravate postwar inflation.

The inflation in JAPAN is unique because of the absolute shortage of food. The loss of the balance of supply and demand of food and other daily necessities resulting from the loss of territories, destruction from the air, urban and rural district devastation, natural calamities and restriction of foreign trade would have brought about a great increase in prices even though no inflation had taken place. The Japanese nation has thus been thrown into its present day distress.

A great inflation which had overtaken the Japanese-occupied regions in CHINA was caused by depreciation of the military scrip circulated there because these notes were not backed by any securities. As a matter of fact, the Chinese were not affected very seriously by the inflation because they had their own goods to support then, while the Japanese were placed in a predicament.

The main factors which would contribute to the aggravation of the postwar inflation are mentioned here. One is the circulation of yen notes and military scrip amounting to an astronomical figure of 700,000,000,000 yen, which will have to be readjusted. Reparations are estimated at about 20,000,000,000 dollars if the amount is the same as that of GERMANY. This amount corresponds to about 300,000,000,000 yen on the basis of the yen-dollar conversion rate fixed by Supreme Command of the Allied Powers. There is about 25,000,000,000 yen of the wartime fire insurance money yet to be paid. The indemnity of loss for the munitions companies will total about 33,000,000,000 yen, although port of it is overlapped with the wartime fire

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ECONOMIC SERIES: 28 (Continued)

ITEM 3 (Continued)

insurance money. Money borrowed on the spot overseas since the 1943 fiscal year has totalled about 58,600,000,000 yen. The currency redemption readjustment fund for banks overseas totals about 6,000,000,000 yen. Annual expenses required for the Allied troops amount to about 12,000,000,000 yen. Plus all this, there will be a huge sum of money necessary for the indemnity for losses of Japanese enterprises overseas and relief and repatriation of Japanese residents abroad. All told, the Government debts are roughly estimated at 1,200,000,000,000 yen.

The 1946-1947 fiscal year's budget of the Japanese Government is estimated at 15,000,000,000 yen in expenditures, including absolutely necessary expenses such as those required for the war calamity rehabilitation and production increase of food, and 7,300,000,000 yen of interest, the annual interest payment for Government debts. Against this, revenue is estimated at 12,700,000,000 yen, which consists of 9,600,000,000 yen in tax and stamp revenues, 900,000,000 yen of the income from Government enterprises and 1,900,000,000 yen of other income (of which 500,000,000 yen will be the income iron sales of Government property), The budget reveals a deficit of 2,500,000 yen.

Supposing that the Government debts totaling more than a thousand billion be paid on a ten-year installment basis, the Government must pay 100,000,000,000 yen each year, against which the annual revenue is only about 13,000,000,000 yen. How is the Government going to make good this heavy deficit? The Government is contemplating raising about 70,000,000,000 yen by means of the establishment of property tax, administrative readjustment, reform of the pension system and by selling Government property and monopoly enterprises. Is it, however, possible for the Government to conquer inflation of such a vicious nature by those stems only?

Full translation:

The fibre industry has been suffering from a shortage of coal. Coalallotment to the industry is 75,000 metric tons in the first quarter, 58,120 in the second quarter and 89,200 in the third quarter of this fiscal year. (In these figures military demands are noted in the first and second quarters.)

During this quarter, coal rationed to the industry has been increased by 30,000 metric tons, due to decreased military demand compared with that in the preceding four months. But, as coal conditions have become suddenly worse, no coal rations can be expected in November and December. This condition is likely to lead to a crisis in which all the fibre industry, including that of artificial fibre, and pulp for artificial silk and others, will not be able to operate. Of these, the pulp industry is already at a critical point. In the artificial silk industry, there are six factories in operation new, and it is unlikely that any of them will be forced to shut down.

During wartime it was asserted that coal was a key raw material in the production of artificial fibre. Nowadays, in addition to this, materials, especially sodium and carbon di-sulphate, and labor have

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ITEM 4 (Continued)

become very scarce. This has resulted in reduced production of artificial fibre to about 600,000 pounds. At present production consists of 15 per cent in artificial silk fibre and 2.4 per cent in staple fibre of the total possible productive capacity and this warns of a severe drop towards non-operation. Coal-rationing is anticipated at 59,500 metric tons in this quarter. The plan for production of artificial fibre aims at 13,000 pounds during that period. But, when the present coal shortage, in addition to the scarcity of sodium, is considered, this plan represents more wishful thinking on paper.

As for the dye industry, which is operated on a smaller scale, it can manage to operate its factory by using black-market coal and other substitutes. Therefore, the coal shortage has not had so decisive an effect on it as it has had on the artificial fibre industry. But there too, some 30 per cent of the plants have shut down operations and the percentage is increasing.

Distribution "X"

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