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Press translations [Japan]. Economic Series 0126, 1946-01-04.
Supreme Commander for The Allied Powers. Allied Translator and Interpreter Section.

translation-number: economic-0621

call-number: DS801 .S81

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No. 621 Date: 4 Jan 46


ITEM 1 Government Economic Measures - How They Are Working Out - Suggested Improvements - Nippon Sangyo Keizai (TOKYO) 1 Jan 46. Translator: T. Ukai.
The Japanese economy is approaching collapse because of the awful progress of inflation. The circulation of notes of the Bank of JAPAN (NIPPON GINKO) is coming up to 56,000,000,000 yen, and prices of commodities are being raised to the sky, through inadequate control regulations. This is resulting in a general feeling of hopelessness among the people as they see their savings eaten up and food shortages and high prices continuing. If the inflation continues, it may result in utter stoppage of money circulation, collapse of the economic system and eventual famine. To counteract this tendency, the Government would like to start a deflationary policy, stabilize prices of commodities and do away with price controls. The Government would like to carry out the post war financial readjustment through levying the war time profits tax and property tax. According to the Government, control of commodity prices will aid in the conversion to peace industries. In reality, however, these measures are turning out to be merely a show, revealing the inefficiency of the Government itself. The inflation is nothing but suicide. In order to do away with this inflation, the Government must courageously carry every active, effective and urgent measure into practice. The following measures are recommended for overcoming inflation.
Finance: It is dubious whether it will be possible to achieve financial readjustment and reconstruction of a healthy finance only thru the wartime profits tax and property tax, which are estimated at about 100,000,000,000 yen. Also dubious is the possibility of overcoming the progress of the present inflationary tendency. Even if a revenue of 100,000,000,000 yen were possible, when we see the flood of notes issued by the Bank of JAPAN, the effect of taxation on checking inflation will probably be small.
Currency: The circulation of notes of the Bank of JAPAN at the termination of the war amounted to 30,200,000,000 yen, and increased to about 50,000,000,000 yen on 15 December. At the end of the year this came very near to 56,000,000,000 yen. On the other hand, deposits in banks in TOKYO have been decreasing since November 1945 because the people suffering under the very high prices of the black market, are drawing out their money in order to get commodities of daily use, as well as food. It cannot be overlooked that the levying of the property tax and wartime profits tax also plays a role in this tendency, for there are people who prefer to change their money into actual articles.

The Ministry of Finance made known a special favorable treatment in the taxing of savings deposits, but this is ineffective in checking inflation. At present, wartime profiteers, landlords, agrarian producers, as well as those who escaped war damages, are more favorably situated than those that live on salaried incomes. The one unique

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ECONOMIC SERIES: 126 (Continued)

ITEM 1 (Continued)

policy of the Government to meet this present state of things is to forbid to a certain extent the withdrawal of money from banks. In doing this the Government should not wait for the issuance of new yen. Of course, this does not mean a prohibition, but it should be confined to some limited amount. Thus, the people would have a more equal chance to obtain actual goods, and the increased circulation of notes of the Bank of JAPAN could be checked. Loans of industrial funds and capital should be permitted only to those who would convent actively to productive peace time industries.
Commodity Prices: The Government has failed to establish a firm price system on commodities, while it has removed the outward frame of price control. The prices of scarce articles have, as a result of the black market, jumped so very high that they are as much as ten or 100 times dearer than they had been. The Government made a mistake in removing controls because it thought that commodity prices would be stabilized by some "unknown hand" after they were restored to free market conditions. That the abolition of price control could not really restore the standard of production is obvious. The absolute quantity of commodities was not restored. The advance of inflation does not make prices of commodities come near to product on costs, but it helped brokers make a thriving business in the black markets. To reduce commodity prices, the wholesale destruction of the black market and driving away of these brokers is necessary. The Government must establish standard commodity prices appropriate to the present economic conditions, setting in order again the distribution system. Control of commodity prices will be necessary until the absolute amount of production increases, and the system must be one that is based on economic liberty and not based on the bureaucratic dogmas degenerating, in the long run, to control for control's sake.
Indemnification for Military Enterprises Must be Checked: The reconstruction of national economy aims at restoring productive capacity. The Government intends to indemnify military enterprises by giving national guarantees of 46,000,000,000 yen. The Government thus intends to establish the basis of thriving peace industries, encouraging wide circulation of commodities of daily use. But this simply means an inflationary policy and makes a strong contrast to the deflationary principles that the Government declares it favors. Moreover, Capitalists and industrialists are continuing to sabotage in silence. They are not producing. This productive sabotage consists in avoidance of paying taxes on their wartime profitant property, and at the same time trying to get the Government-promised guarantee-pay. As the indemnification program really checks productive activities and means a vast expense out of the national treasury and a great burden on national finance, this policy must be controled as much as possible.
Measures for Food: First of all in this category comes the rice delivery by farmers to the Government Boards and bureaus of the Government must lead the way and stop what is called special distributions and large-scale purchases, A perfect distribution organ must be set up in the very near future which will speed up crop deliveries to the Government.
ITEM 2 Manufacture of Railway Cars Making Little Headway - Nippon Sangyo Keizai - 3 Jan 46. Translator: T, Mitsuhashi.
Full Translation:
The State Railway Board has been making every possible effort to construct and repair cars as this is second in importance to the solution of the coal problem. The production of cars in December, 1945 totaled 11, including six tram cars and five carriages. The scheduled production up to March 1946 is as follows:
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ECONOMIC SERIES: 126 (Continued)
ITEM 2 (Continued)
January 28 39 67
February 66 37 103
March 63 41 104
January - March 65 26 87
ITEM 3 Urgent Supply of Rice to TOKYO City and a Supply of Rice from NAGNO-Ken - Nippon Sangyo Keizai - 3 Jan 46. Translator: T. Mitsubishi.
Full Translation:
To meet the present food crisis in TOKYO, 120,000 koku of rice will arrive here from SAITAMA-Ken, CEIBA - Ken, TOCHIGI-Ken and IBARAGI-Ken as an emergency supply for the end of 1945 and the beginning of 1946. Out of this amount, 95.000 koku were easily transported from SAITAMA , CHIBA and TOCHIGI through the efforts of the employees of the TOKYO Food Transport Company (TOKYO SHOKUPYO UNSO KAISHA), who worked during the Christmas and New Year holidays. However, the transportation of rice from IBARAGI-Ken has been delayed owing to the lack of transportation from the storehouses and other places to each railway station. After pleas by the Food Section of the Metropolitan Office and the TOKYO Food Office, the TOKYO Food Transport Company has consented to go to IBARAGI-Ken to collect 25,000 koku of rice from various areas there, namely, SHIMODATE, SUIKAIDO, EDOSAKI, RYUGASAKI, TORITE, HOKODA, KASHIMA, ISHIOKA and ASO. It is expected to be completed within ten days by using 20 trucks.
NAGANO-Ken, which has been considerably active in encouraging the supply of rice, will achieve better than a 60 per cent supply by the end of December, 1945. As a measure to express gratitude for the rice supply, a target label will be pasted at the homes of all farmers who completed the 1945 supply of rice so that every one can easily see which farmers, have done their duty.
CHIBA-Ken has ordered the KIMITSU District Office to supply 2,700 bales of rice in a few days, as an emergency measure, to TOKYO, according to the petition made last year by the Metropolitan Office. The Local Office is now making every possible effort to transmit the required amount of rice, and asks the co-operation of the town and village agricultural associations as well as the railway transporters in that district.
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HomePress translations [Japan]. Economic Series 0126, 1946-01-04.
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