Press translations [Japan]. Economic Series 0029, 1945-11-30.

Summary:

As previously reported, the coal shortage, induced, principally by the exodus of workers from the mines reached a serious stage. Coal stocks at various ports have been exhausted and we are rapidly consuming that stored in mining areas. Hence, the November ration apportioned little or no coal to industries even of an indispensable nature. The producers left without their allotments of coal must procure it in the non-fixed price market.

The steel industry, naturally, was granted a ration of coke, but the quantity is barely enough to keep the furnaces warm and guard against their cracking. The result of the coal shortages in representative industries is as follows: Steel: At the beginning of September an output of 155,000 metric tons of steel was estimated for the third quarter. The coal apportioned to the industry for the same period amounted to 700,000 metric tons. But the shortage of coal has been felt far more acutely than was at first estimated and finally 73,000 metric tons of coal was set for the steel industry which is supposed to be just enough to keep furnaces warm. Putting several iron producing works together that will survive during December their output will net be over 7,000 metric tons. This is one-twentieth of pre-war production, which was 350,000 to 400,000 tons a month. The clamor for coal will be heard before next spring, when destroyed factories resume their pre-war production.

Products made of steel: The output of finished steel products is estimated at 11,400 metric tons for nails, wire, steel cord in the first stage of production, and 40,000 metric tons for the finishing stare in production of those items. Iron and Steel Control Association is of the opinion that the actual production will drop to one-fourth of that planned.

Cement: The output of cement in September and October was 37,000 and 38,000 metric tons respectively. This is about the former monthly average of one production unit. While the coal ration for the three months ending in December is set at 12,900 metric tons, almost nothing was distributed up until today. Only those with some stock are eking out meager production. According to the Cement Control Association the total coal stocks held by cement factories is estimated

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at 80,000 metric tons which scarcely enables them to keep plans running until the end of the year. The output of cement with 80,000 metric tons of coal available will be around 200,000 metric tons. Meanwhile, the Commerce and Industry Ministry raised the official cement price considerably so as to stimulate production. It failed because the major drawback in cement production is the coal shortage and not in the price.

Gas: Gas Control Association announced that 968,000 metric tons of coal are necessary to meet the latter half year demand for gas. The gas companies learned that it was merely a desk plan almost impossible to realize. Tokyo Gas Company was entitled to 37,930 metric tons of coal, while it was actually supplied with only 17,157. Hereafter, except for those of KYUSHU and HOKKAIDO, only big scale companies will be qualified for coal allotments. Though Tokyo Gas Company demands 4,500 metric tons of coal daily, it is supplied with only 500 metric tens.

Full translation:

The Unutilized Resources Flour Milling Association, with the purpose of making flour out of starch, residues, sweet potatoes, leaves and vines, mulberry leaves, acorns, and grasshoppers, has been formed in CHIBA Prefecture. Located in the Prefectural Food Stuff Corporation Building, the business was started on 10 November. It has begun activities by studying unused resources, materials, technical guidance, propagation, examination of products, and the milling process. In this flour process the techniques, hitherto used by the ordinary flour mills, is adopted and the munition's plants are utilized to some extent. As for the milling process, speedy cracking machines are used; specially made new machines will be used in the future.

With this equipment, 86,000 koku of flour are expected to be produced out of previously unutilized resources. Within the year, the Agricultural Corporation, the Forestry Union, and the Fishery Union will take charge of collecting the materials and co-operate with each other. The Prefectural Food Stuff Corporation, will buy all the flour that is produced, and after it is made into cakes, dried macaroni, and biscuits by experts distribution to all homes will be made.

Summary:

When inflation develops beyond a certain point, it will bring in its wake the destruction of the present economic as well as social order reflected in our politics, culture and morality. It will create a new world which is different from the capitalistic order. When inflation reaches such a stage, countermeasures against inflation will simply aggravate it and finally lead it to worse situation.

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The havoc which swept over GERMANY after World War I was caused by the fact that the German capitalists in general strongly opposed Government interference with private ownership, the method which is generally believed to be the most effective policy against inflation. The German Government, then weak, organized after the revolution and, unable to withstand the opposition of capitalists, it readily yielded to and effected a compromise with them. The result was that one control after another was removed, and proposals made by labor unions which insisted that restrictions be placed on private ownership as counter measure against inflation were utterly ignored.

The extent of restriction on private ownership differs according to the scale of inflation. During a certain period of inflation restrictions will not menace the interests and control of capitalists, but when inflation goes beyond a certain point, restrictions on private ownership must be strengthened. Even some radical steps may have to be adopted. Inflation of vicious character cannot be conquered without adopting this policy.

The technique necessary to restrict inflation cannot be put into effect when the old capitalist control and order are supreme. Inflation can be checked only when a democratic and socialist structure is set up.

Therefore, the problem of reducing inflation is a political one. A central administrative organization with the power to control private ownership is needed. It is urgent that we study whether or not inflation can be stopped under the present capitalistic structure in JAPAN.

Finance Minister SHIBUSAWA in his statement to the press on 16 November made clear his intention of carrying out the necessary steps against inflation under the capitalistic system, stating that such steps can be practiced effectively. His statement will probably represent the policy and character of the present Cabinet, as far as the anti-inflation policy is concerned. The Finance Minister in his statement referred to the Government indemnity of losses and wartime profits and said, "In some circles, it is believed that the Government should cancel its previous promises for the indemnity of losses, but I doubt that for the Government to break faith would contribute much to the consolidation of financial reconstruction and effective anti-inflation measures. Others argue that all wartime profits should be taken back by the Government, but it is hard for anyone to define what wartime profit is."

Viewed from the standpoint of the capitalists who are trying to retain their former control, the cancellation of promises for the loss indemnity by the Government would be a breach of faith, but under the democratic order of liberating the people from the shackles of the capitalists, the cancellation means that the Government is not breaking faith with its obligation to protect the public interest.

The present inflation in JAPAN is so severe that it cannot be conquered only by the cancellation of promised indemnity. More thoroughgoing and drastic measures are badly needed. SHIBUSAWA's statement lacks thoroughness and thought. Continuing to discuss the inflation problem, SHIBUSAWA said, "Many people are pessimistic over the inflation now taking place in this country and are under the misapprehension.

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that measures to remedy the situation are impossible. However, I don't think so. The currency, bonds and deposits, which are the common denominators of inflation, are credits of people with the Government. So, this is only a question of the distribution of wealth among Japanese themselves. If the Japanese are seriously determined to conquer inflation, it can be surely done. I place my full confidence in the Japanese people on this point."

It was the Japanese public who devoted themselves to the defense of their country, sacrificing their lives and property. What had the capitalists been doing during the war? People now have come to know all sorts of illegal and deceitful actions of capitalists in collaboration with the military and bureaucrats and no longer are deceived by SHIBUSAWA's statements. SHIBUSAWA says he has full confidence in the people, but the people no longer have full confidence in the government. One reason no anti-inflation measures, though some of them are sound, are working, is because of the people's distrust. SHIBUSAWA also said, "I don't agree to a policy of extracting money from wealthy men only. Of course, the redistribution of wealth is necessary for JAPAN, but what is more important is to increase production. Strict care should be taken not to interfere with the efforts to increase production, at a time when people are absorbed in the struggle for the redistribution of wealth. The present is not the time when men scramble for a small portion of wealth and materials, but an all-out effort must be directed toward making a small portion a large one, and this should be done through mutual friendship."

It is clear that SHIBUSAWA does not understand the real substance of the prevailing inflation which has taken place under the present Shortage of wealth. His statement simply fools the public. Inflation must be conquered before an increase in production can be realized, and to do this the wealth must be redistributed among the impoverished people.

In addition to this, a policy to socialize production in the basic industries must be initiated, so that the anti-inflation policy will be effective. If the present anti-inflation policy continues to be adopted without change in the economic system, the inflation will go from bad to worse and in the near future, the situation will be thrown into confusion beyond control. Democratic ceuntermeasures against the inflation are necessary. The longer the non-democratic administration lasts, the greater will be the people's disaster.

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