Press translations [Japan]. Economic Series 0330, 1946-02-19.

Summary:

Financial circles have been longing for a comprehensive series of powerful measures to be taken by the Government against the precarious condition of the recent inflation. Therefore, the present emergency economic measures are welcomed with wholehearted support by financial circles.

For the exchange of new yen notes for the old ones, about 30,000 financial facilities are available throughout the country. They consist of 5,200 banks, about 13,000 credit unions and 13,000 post offices. Supposing there wore 15,000,000 households in the country, each financial organization will have to deal with 500 households on an average. And preparations for smooth exchange are finished already.

The emergency measure will begin on 25 February with the exchange of the new yen notes, but the actual absorption of cash by the financial organization will begin on 3 March and end on 7 March. As the result of this absorption, banking facilities, which are suffering from fund shortages due to endless withdrawals of deposits and the vast increase of loans, will be suddenly relieved of fund difficulties. Of course those big banks which have borrowed a huge amount of money from the Bank of JAPAN (NIPPON GINKO) will use a large amount of the absorbed money for repayment. As a result of this repayment collateral securities will be turned back from the Bank of JAPAN to those big banks. And recently, interest per diem on borrowed money from the Bank of JAPAN was set at a high rate of 1.2 sen, so, by the repayment of such a high interest on loans, those banks will improve their management.

But if increased food production and price stabilization are not realized, deposits will not keep pace with increasing cash withdrawals. By the present measures, financing organizations will be entrusted with the handling of cash withdrawals for living expenses and all loans for business funds and will have a dominating power over industrial circles.

The future of industry therefore greatly depends on the financiers. A most cautious attitude should be taken in lending money to businesses. If the ban[illegible]s neglect a close investigation in lending money to industries they will run the danger of disturbing price control. In any case, difficulties are forecast in the future of the finance situation and there is a demand for strong measure to be taken according to circumstances.

ECONOMIC SERIES: 330 (Continued)

Full Translation:

The Ministry of Welfare has recognized the settlement of the standard wages, which has played an important part in inflation measures, as the basis of the Nation's livelihood. Therefore, it has been studying the necessary lowest wages system settled in the Central Wages Deliberating Council Committee for some time, that is, to pay a salary of 450 yen to each thirty-year-old to fifty-year-old householder (man), and to pay a salary of 150 yen to each twenty-year-old to forty-year-old woman. This standard wage is based on the level of all prices in January 1946.

The Government has been re-studying the standard as compared with the new price control system and recently decided to decrease the difference of wages between men and women as little as possible, reducing a mans' wages to little below the above level or increasing the level of a woman's wages, and to abolish the highest wages system and the limitation of total earnings system. The problem of wages will be solved as quickly as possible.

Summary:

In order to carry out the series of the emergency economic measures, the Government is ready to issue the required imperial ordinances and administrative measures to follow this up. Let us take a glance at the policy of each ministry.

Finance Ministry—A vast sum of a 100 billion yen will be collected from men of wealth under the property tax. A re-study is needed to appropriate the whole sum to the redemption of war bonds. Resolute thinking also is to be given to war indemnity. It is desirable that the Ministry gives financial assistance to production till the setting up of a Reconstruction Finance Company (FUKKO KINYU KAISHA) to be advanced by the Ministry of Commerce and Industry. Parallel with the above-mentioned measures, a new price system will have to be set up promptly.

The Ministry of Commerce and Industry—The Ministry has announced the Emergency Hoarded Goods Measure in response to the ordinance issued by the Finance Ministry and clarified a production program of civilian goods during the coming six months. We, however, find it difficult to perceive anything positive in these announcements. The Ministry should make every effort for the enactment of a Reconstruction Finance Company bill and a Post-war Temporary Management measure. This is not all. The most important remaining task is to adjust the channels, from raw materials through production to distribution, through which consumer goods are forced to go.

Ministry of Agriculture and Forestry—Though staple foods have been brought under strict regulations outwardly by the Emergency Food Measure, there is a feeling that the measure should be carried out in a democratic way and that the rationing system should be reformed. As there is no indication of an increase of the ration of staple food at present, perishable food should be secured at any risk. The Government aims to lower market prices. For this purpose a double price system is under consideration. That means, perishable food purchased by the government is distributed to consumers cheaper than the price for which it was purchased. The problem, however, cannot be resolved only on a financial basis such as this. A permanent system must be evolved.

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ECONOMIC SERIES: 330 (Continued)

ITEM 3 (Continued)

Ministry of Welfare—Some 3,700,000 unemployed are expected to get jobs through the Emergency Employment Measure. The main point is to give jobs to people willing to work and to rescue people from poverty. The Ministry is starting a program by which cripples and disabled persons are to be assisted in their livelihood by the Emergency Livelihood Assistance Measure. It goes without saying that the minimum wages or standard wages system should be rediscussed. Not only emergency measures but permanent ones should be set up for the jobless.

Home Ministry—What has been made clear by the Ministry in connection with the series of emergency economic measures is only how to maintain public order. Of course the maintenance of public order is important. The Ministry also is pressing on with a permanent national program for the reconstruction of defeated JAPAN in close relation with each ministry.

Full Translation:

The Government is preparing measures for the relief of the unemployed, war sufferers, repatriates, the sick, and the wounded. The cost of the relief measure is estimated at two hundred million yen. The Welfare Ministry is preparing to submit the Public Welfare Law (SEIKATSU HOGOHO), the Relief Law, the Military Benefits Law, (GUNJI FUJOHO), the War-Damage Relief Law, and the Medical Aid Law to the forthcoming session of the Diet, in order to extend its relief and welfare plan. The Welfare Ministry has negotiated with the Ministry of Finance about the estimates of two billion yen for about 4,200,000 people, which comes to about 1.35 yen per man per day, according to the Military Assistance Allowance. However, this will be raised in accordance with the minimum wages which will be decided in the near future. Moreover, as the stoppage of the military pension system has had a great effect on the nation's livelihood, the Welfare Ministry is preparing definite plans for a committee on public insurance. A bill establishing such a committee is to be presented at a Cabinet meeting.

Summary:

The Government has at last initiated a comprehensive series of emergency measures designed to deal with the present precarious economic situation. The new measures are to check the progress of the inflation which has been growing to dangerous proportions. But the entire nation must observe its development closely as the solution is left to the future. The recent measures, have significance in the equalization of the nation's purchasing power.

Hereafter, the purchasing power of the people, whether he be capitalist, money-lender, or working people, will be restricted. For the time being, the nation is to be controlled entirely by the Government. However, in order to attain the ultimate objective of these measures, the following two policies will have to be practiced for a long time

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ECONOMIC SERIES: 330 (Continued)

ITEM 5 (Continued)

to come. The first is the fair rationing of foods and other daily necessities throughout the nation along with the equalization of purchasing power. Unless the Government establishes a fair distribution process for these essential commodities, the nation will be unable to avoid difficulties in the production of key commodities in the future, and this will mean starvation for the people.

Before effecting compulsory measures for farmers, the Government, should check the present sabotaging of production purposely being practiced by capitalists. Meanwhile, increasing production of key commodities, smooth shipment, and putting of hoarded goods back into circulation are also of great importance. The second matter is closing loopholes in the recent measures, while setting up immediately counter-measures for indemnifying former munition companies. As we can see from the postwar examples of FRANCE and other European countries, if the complete exchange of currency and the following strict blockade are not carried out, the plan is doomed to failure. In the present serious situation, the Government must advance with firm resolve, otherwise, the national economy of JAPAN will be overthrown by the inflation. In short, the question is can the Cabinet of SHIDEHARA bear the burden of these important measures.

DISTRIBUTION "X"

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