Press translations [Japan]. Economic Series 0332, 1946-02-19.
Date19 February, 1946
translation numbereconomic-1429
call numberDS801 .S81
Persistent Identifier
ECONOMIC SERIES: 332
ITEM 1 A Series of Government Steps to Increase Production - Nippon Sangyo Keizai - 18 February 1946. Translator: R. Shibata.
Full Translation:
Recognizing that the most effective measure against inflation is to increase production,
the Ministry of Commerce and
Industry, following the two steps of the compulsory purchase of concealed and hoarded
material s and price control of daily
necessities intends to take the following three steps which will be of great service
in increasing production:
(1) Designation of plant s of important industries. The productive elements such
as materials, labor and funds will be
preferentially allotted to those plants of important industries which have the most
favorable production conditions. For
designating these plants and industries, an urgent Imperial Ordinance will be used.
Coal and chemical fertilizer, especially
ammonium sulphate, are to be of the highest priority.
(2) System of plant committees. In order to avoid any conflict between capitalists
and laborers, plant committees will be
formed representing both sides. This will take charge of the rationalization of working
conditions, improvement of sanitary
and welfare institutions and arbitration in labor disputes. This, however, will have
no part in the management. In addition,
the formation of the committees will be legalized.
(3) Establishment of new companies. As a temporary step to promote the establishment
of new companies, until measures are
legalized by the approval of the extraordinary Diet, the Ministry intends to set up
a loophole in the present law. This will
enable businessmen to establish a new company without the approval of creditors and
mortagee of the old companies and at the
same time, facilitate the financing of these businessmen and request financiers to
participate in the new company as
shareholders. In addition, it will provide for the growth of new companies by favoring
them especially in the supply of
materials and labor.
In connection with these steps, the strengthened control of distribution and consumption
should necessarily be considered. The
Ministr is studying this problem and will make some announcement in the near future.
As for the mechanism of control, it
intends to apply the laws on industrial organizations which are to be presented at
the next session of the Diet. As a rule,
the present control organizations will also be utilized in future control.
ECONOMIC SERIES: 332 (Continued)
ITEM 1 (Continued)
Next, we should examine the effect upon production by the Government's two steps,
the compulsory purchase of concealed and
hoarded materials and control of prices of commodities.
(1) According to the emergency ordinance issued by the Government, all materials
concealed and hoarded by any corporation or
individual are to he purchased by the present control organizations. These vario[illegible]types of
commodities are to he purchased at official or reasonable price s and distributed
to war sufferers, repatriates and farmers as
well as to producers through ordinary channels. We must criticize the lukewarm steps
adopted by the Government in its
establishing of ten exceptions in article 2 of the Ordinance. The latter provides
for the outright requisition of concealed
and hoarded materials by prohibiting a transfer, change of shapes and quality or removal
during a certain period.
At present, when capitalists are sabotaging production and being allowed to obtain
large profit s from the rise in the price
of material[illegible]the concealed and hoarded materials should be requisitioned as quickly as possible
by
drastic measures and then distributed to those producers who are most willing to produce.
In this case, the distribution must
be conducted smoothly and rapidly in order to meet the urgent need for those essential
materials. This necessitates a rapid
improvement in the present imperfect distribution organization.
(2) The Government has decided to control prices of commodities for the purpose of
stabilizing them and carrying out
production and distribution smoothly according to the plan. As a first step, it established
ceiling prices on 220 types of
daily necessities. According to the announcement by the authorities, price s of other
types of daily necessities will be
indicated gradually but prices of other commodities will be controlled by the fixe
d price system as before.
The doubtful aspects with regard to the ceiling price system are the following points;
(l) the ceiling prices were fixe d at a
very high level as no consideration was giver to the new economic situation brought
forth by the blockede of deposits and
issue of new bank notes. (2) It was inevitable that prices should be fixed on the
basis of black market prices since the
authorities calculated costs of commodities upon the purchasing pric[illegible]s reported by department
stores and other merchants. (3) It will be necessary to revise the ceiling prices
basing them on lower cost s as a preliminary
means to meet the coming economic situation produced by deflation. (h) How will the
numerous street stalls be dealt with and
how will the ordinary commercial organizations be established hereafter?
In order to obtain the full effect of these two steps, the Government must use strong
political power. At the same time, it
should endeavor not to end these steps simply as negative measures against inflation,
but should induce industrialists to have
considerable zeal for production. It is highly desirable that the authorities adopt
drastic steps such as the revision or
abolition of the Enterprise Restriction Ordinances (KIGYO KYOKAREI), the Extraordinary
Fund Adjustment Law (RINGI SHINKIN
CHOS[illegible]IHO), the Ordinances on the Investment of Bank Funds (GIKOTO SHIKIN UNYOREI), etc.,
or to
faciliate the financing of civilian goods producers by establishing the Reconstruction
Finance Company FUKKO KI[illegible]YU KAISHA) as well as other measures.
- 2 -
ECONOMIC SERIES: 332 (Continued)
ITEM 2 Future Development Government Emergency Measures - Nippon Sangyo Keizai - 18 February 1946. Translator: Y. Kurata.
Full Translation:
The future development of our national economy depends solely for its success on
the present Government's comprehensive
program of national reconstruction and rehabilitation, including various kinds of
emergency steps toward control of food,
currency and commodities. Since the termination of the war, our national economy has
found itself plunging found to total
collapse with the growing social unrest and economic chaos resulting from the swollen
currency, the considerable decrease in
the production of daily necessities, and the consequent sharp increase in commodity
prices. Such being the case the
Government, in response to public opinion charging it will inability to curb inflation
and insisting upon the necessity of
taking drastic steps to save the nation from economic collapse and stabilize the livelihood
of its 80,000,000 people,
established the Price Department within the Ministry of Finance thereby taking up
discussions with the Cabinet Deliberating
Council and the Postwar Currency Deliberating Council on problems requiring immediate
solution, hence the present emergency
economic steps.
Therefore, it is not too much to say that the present Government steps are those
aiming at bringing about deflation, while
leaving the hithert prevailing inflation untouched to some extent. It goes without
saying that the Government's emergency
measures have the following major aims. To decrease the current excess purchasing
power amounting to 60,000, 000.000 yen so as
to set up a new price level; to stabilize wages and salaries on the basis of the foregoing
price level; to secure food and
other daily essentials; to solve the unemployment problem thereby stabilizing the
livelihood of the nation.
In snort, the Government intends to control our national economy while bringing about
suitable balance between the fixed
amount of new currency and the prices of such staple goods as food and coal which
are to be fixed hereafter. In view of the
present situa[illegible]tion, we are right in thinking that it will take about three years before our
national economy finds its steady course leading to complete stabilization. We are
convinced that through the Government's
steps, the present floating currency amounting to more than 6l,000,000,000 yen will
be reduced by March this year to 2 or 25
billion yen i[illegible]eluding living as will as indust[illegible]ial funds, and will
continue to decrease to about l6 billion yen by 1949, which is an increase of ten
times the 1,600,000,000 yen in circulation
in 1937. The present commodity prices will likewise be reduced considerally.
Along with this, it is also desirable that in food we should become as self-sufficient
as possible and at the same time the
production of staple goods such as coal and other necessities should be restored to
their normal capacity by 1949.
Nevertheless, there still remain unfavorable conditions such as the following:
- 1.Since the Government declared it impossible to increase food rations even by means of emergency measures, the people still face the difficulty of living un[illegible]er the 2. 1 go rice rationing system without - 3 -
- ECONOMIC SERIES: 246 (Continued) ITEM 2 (Continued) being able to buy black market commodities.
- 2.Although we look forward to the increased production of staple commodities, will the Government be able to secure necessary amounts of these commodities for urgent needs?
- 3.There is great fear that although the new bank notes are now restricted, they may increase in circulation again as a result of the shortage of staple commodities.
- 4.There is strong possibility of inflation returning if the Government has recourse to deficit financing in the present fiscal year, especially to relieve unemployment.
As may be seen clearly from the above, the Government must first of all overcome
the foregoing difficulties in order to carry
out its emergency measures effectively.
DISTRIBUTION "X"
- 4 -
Loading...