Press translations [Japan]. Economic Series 0113, 1945-12-29.

Summary:

The amended Agrarian Law, approved by both the Houses on 18 December, is designed to create a new Japanese economy. Work is being rushed to put this law into effect immediately. The Government transferred it to the Legislation Board (HOSELKYOKU) on 26 December with every possible procedure prepared.

On 7 January the Agrarian Investigation Committee (NOCHI SHINGI KAI) is to be set up to decide on the reduction of larger holdings to the limited five chobu. The law will be set in practice, at the latest, on 10 January with the necessary Imperial Ordinance issued.

The mission of the Agrarian Investigation Committee is very important, because the limiting of the acreage of landlords was the most discussed question in the past session of the Diet. The members to form the Committee will be selected from all the professional fields, including both Houses, scholars, journalists, etc. Though the Committee was scheduled to contain 20 members, it will be formed actually of 30 members with 10 members participating temporarily. When the landlords' acreage is reduced to five chobu, the price on sale of land to tenants will be set so that the price of rice paddy-fields equals 40 times the rent imposed upon tenants for such land and that of vegetable farmland is 48 times as high as its rent.

The subsidy to be given to landlords is 220 yen and 130 yen for rice paddy field and vegetable farm land respectively. This subsidy is calculated on the basis that there is a difference between the price to be paid by landlords and the profit to be obtained in their own farming. Rent in crop is abolished, and rent in money adopted in this law. The price of rice, by which the sum of money-rent will be decided, has been raised from 55 to 75 yen per koku.

In the course of carrying out the law, the Agraria Committee to be formed in every town and village will play an important role. These agrarian committees will be formed immediately though Imperial Ordinances issued on the subject. Another organization, which is now in operation will manage the business instead for the time being This Agrarian Law may bring about serious problems in rice deliveries. How this agrarian reform will affect rice shipment is a problem to watch.

ECONOMIC SERIES 115 (Continued)

ITEM 2 (Continued)

Summary:

The Government, sometime ago revised a number of control laws to increase timber production and vainly hoped for more activity by timber operators through self-control, but timber operators held back, hoping for the total abolition of the control laws. The Ministry of Agriculture and Forestry reassured them through its vice-minister on 26 December, that a study of Local Lumber Yards would be made, and that it may be possible for them to continue in the same way as other commercial firms in general. Details are as follows:

• 1.A number of timber supply and demand adjustment associations (M[illegible]UZAI JUKYU CHOSEI KYOGIKAI) shall be established to examine and decide the amount of production and distribution of timber in central and local districts. The local assembly shall draw up, not later than 15 December 1946, programs for supply and demand of timber for the following year and decide on the main necessary procedures to increase timber production and to meet necessary demands for reconstruction work in war-dawaged regions. It will also give necessary general directions to co-operative bodies and operators concerned, in general.
• 2.Thirty million koku of timber, or 30 Per cent of the total allotment for this year, shall be assured as well as arranged for distribution, and the momement for winter production of mountain timber (MOKUZAI FUYU- YAMA ZOSAN UNDO) shall be started from 1 January to 31 march 1946. The newly established Local Supply and Demand adjustment Association (CHIHO MOKUZAI JUKYU CHOSEI KYOGIKAI) will foster timber distribution, concentrating on delivery during the period assigned for urgent utilization. Laborers on this project are to receive increased distributions of major food, as well as the necessities of daily life. Producers will be provided with increased supplies for their laborers. Distributions shall, in part, be linked with production it self by giving major food at a rate of one go per one koku of timber shipped. Laborers for transportation shall be given increased rations of one go of [illegible]major food per five koku of timber transported, besides the increased special reward-distribution of fodder for draft animals.
• 3.In order to keep fair distribution and prices, black market operations will be closely watched and punished.

Summary:

The spending of the colossal sum of 222,100 million yen for the war budget since the beginning of the CHINA Incident is the fundamental cause of the present financial plight of JAPAN. At present, Government bonds amount to 130,000 million yen and the banknote circulation is increasing by the hundreds of million yen every day. Added to this, the shortage of food and coal is pressing national economy to the wall. If left as it is, the Nation will collapse sonner or later. Here we will review the national economy in order that we may find the aim and methods of its reconstruction.

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ECONOMIC SERIES 113 (Continued)

ITEM 3 (Continued)

First, let us see the trend of banknote issuance since the end of war on 15 August (in millions of yen):

The above table shows a tremendous increase since the end of the war. During the later half of August it as inflated by 12 billion yen. Since then, for a while it seemed to remain tranquil, but, now it has begun to be in a turmoil. At present, bank note issuance is increasing every day by 100 or 200 million yen, and it is expected to reach 60 billion yen by the end of the year, thus doubling the already high figure of 15 August. This undoubtedly is the result of the high cost of food imports. The high cost of food is forcing the public to draw out their bank deposits. But at the same time, it is the result of hasty conversion of money into material goods in order to evade the proposed war-profits and property taxes. Such conversion will accelerate inflation further.

The aforementioned taxes on profits and property were directed by Allied Headquarter on 25 November. The Allied authorities also, directed that much financial activity be subject to their authority. Such financial activities are: bond issue, government loans, government compensation and subsidies, the reduction of, or exemption from taxes, and the disposition of national properties and government-owned industries. Allied control was further tightened by the directive of 17 December, which placed the national budget under their authority.

These steps by the Allied authorities deprived the Japanese Government of sovereign power over national financial policies. But this will clear the way for reconstruction of national finance. This is due to the fact that, hitherto, financial and industrial circle in JAPAN were under too much protection and intervention of the Government. At the same time, the bureaucracy in JAPAN was so strong that the scramble of the budget by ministries was one of the chief businesses of officialdom. Only external influence, such as that of the Allied authorities, will uproot such strong traditional tendencies in JAPAN.

The Finance Minister, Mr. SHIDUSAWA, said that the very aim of the new levies is to stabilize commodity prices, and that the people who rush to convert money into material goods will find that they have lost money. It must be thus, so as to make the new taxes really effective. However, since the general public still wants to change money into goods, the plan for new yen notes must be carried out with all speed. Under this plan surplas portions of money will be frozen as bank deposits. At any rate, the money-goods balance must be restored. But in levying the property tax, cars must be taken that the production capital is not unduly strained.

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ECONOMIC SERIES 113 (Continued)

ITEM 4 (Continued)

Summary:

The reopening and reorganization of the Stock Exchange Market which has been closed since 10 August, 1945, is being comtemplated. A final plan has been borned by the [illegible]Securities Company (NIPPON [illegible]) and the Stockbrokers' Association (TORIHIKIN-KYOKAI) in its 26 December combined consultatory meeting.

The plan includes the establishment of a membership system, the disolution NIPPON Securities Company, the setting-up of the new Stock Exchange Assisting Company (TORIHIKI JOSEI KAISHA) which is a kind of estate company, and the adoption of both spot and forward transactions. The establishment of a membership system is something new in the history of the Japanese Stock Exchange. Though the matter was once discussed in 1920 and 1922 at the Exchange Law Revision Committee, it has never yet been made a reality.

DISTRIBUTION "X"

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