KOBE

ECONOMIC & BUSINESSREVIEW
14th

ANNUAL REPORT,g.lrlVEg"":./3

THE

RESEARCH INSTITUTE FORECONOMICS
AND BUSINESS ADMINISTRATIONKOBE UNIVERSITY

I967

KOBE
ECONOMIC & BUSINESSREVIEW
14th

ANNUAL REPORTTHE

RESEARCH INSTITUTE FOR
AND BUSINESS ADMINISTRATIONECONOMICS
KOBE UNIVERSITY

1967

CONTENTS
Page

A Return on the Confirmed Settlementof Accounts .-m.....".........."."..m...".........Susumu WATANABE

1

Problems of Regional Industrial Development
Relating to National Planning in Japan.........Minoru BEiKA

11

The Development of Japanese Trade with the British
Commonwealth in Asia .................................Fukuo KAwATA

21

On the Kihansen (Japanese Wooden
Coastwise Vessels) ............."..............................SeijiSAsAKi

Approaches to Company History ...........................Tadakatsu INouE

41

49

Cumulated Cost Ratios for the ECAFE
Countries .•.."••.•..."-,.m..H."..-...".H...."...,......H.Nobuko NosE

55

International Liquidity Controversy
in Japan (1) ............................................,.....,Masahiro FuJITA

73

Investment Criterion for Maximizing
the Rate of Capital Accumulation ..............,Hikoji KATANo

87

Peculiarities of Maritime Labor-with special reference to the supplyof maritime labor- ...,........,,................Hiromasa YAMAMoTo

93

Los Estudios Del Brasil En El Jap6n-Con Referencia a las Ciencias
SOCiales- ...............................,...."..........Yoshiaki NIsHIMuKAI

107

1

A RETURN ON THE CQNFIRMED SETTLEMENTOF ACCOUNTS
Susumu WATANABE

I
Article 74 of our Corporation Tax Law provides that a domestic corporation shall file a return within two months after the closing date of eachaccounting period, showing the amount of the income of the accounting
period concerned which is the basis of assessment and the amount of thecorporation tax on this income on the confirmed settlement of accounts.
"The confirmed settlement of accounts" in this provision means the settlement of accounts of the accounting period at the general meeting of shareholders or by the whole body of partners or by others corresponding to themas the case may be, and "a return on the confirmed settlement of accounts"

means to calculate on a return the amount of the taxable income according
to the Corporation Tax Law provisions on the basis of the business profit
which appears on the approved settlement of accounts and to show the taxable
income so calculated and the difference between the business income and thetaxable income.

In this way our Corporation Tax Law depends upon the confirmed
settlement of accounts, i.e., the amount of the taxable income is derived fromthe business income on the confirmed settlement of accounts (we may callthis principle that of dependance on the confirmed settlement of accounts).
To understand the meaning of this principle, the following points should be
noted.
(1) The tax law does not require acorporation to close its books so as torefiect the provisions of the tax law, i.e., to settle accounts so that the comput-

ed annual profit shall directly show the taxable income. In other words, thesettlement of accounts of any corporation is primarily made for other thantax purposes, then the amount of the taxable income is derived from theannual income so determined, with necessary adjustments for tax purposes
added to it inareturn. It isa matter of course that the tax law must notrequire any special accounting treatment of its own to be included in thesettlement of accounts of a corporation, since the books are primarily closed

for other than tax purposes. The tax law once granted a special favor with

2

SUSUMU WATANABE

the effect of deferring tax payments on condition that "the reduced entry"
be made in the settlement of accounts. This was an improper interference ofthe tax law with business accounting but the condition has been greatly
improved now.
On the other hand, not a few cases are encountered where accounting
practices are influenced by the tax law so remarkably that the accounting
treatment according to the tax law is followed, although such a treatment is
not required by the tax iaw. Such practices may be due to considerations on
the part of a corporation that since there is no accounting treatment shown in

concrete form in our Commercial Code, it would be better to settle theaccounts in accordance with the tax law from the start in order to avoid
necessary adjustments in a return. But this is not the proper way of thinking, because to settle accounts in accordance with the tax law is to consider

that the highest aim for the settlement of accounts is the tax purpose tocompute the amount of the corporation tax. In Japan, we find the word "taxbookkeeping", which is considered to mean a system of bookkeeping adopting the requirements of the tax law. But we insist that there should notexist such a form of bookkeeping, because the requirements for the calcula-tion of the taxable income under the tax law should not have a place ineveryday practices of bookkeeping or in the settlement of accounts.

(2) The settlement of accounts of a corporation is primarily made by therequirement of the Commercial Code regardless of its necessity for tax purposes. Directors are liable to submit the balance sheet, the business report,

the income statement and the proposal on the appropriation of profit to an
ordinary general meeting for approval, and to publish the approved balance
sheet without delay. Corporations are required to settle their accounts inaccordancc with this provision of the Commercial Code, and the businessprofit which becomes the starting point for the calculation of the taxable
income is the result of the income computation to comply with such requirements. Since the profit under the Commercial Code seems to have thecharacter of disposable profit, the adjustment in a return is made to derive

the taxable income from the disposable profit under the Commercial Code,
Accounting provisions of our Commercial Code are no more than broad ones
concerning the valuation of property without covering details of the accounting procedures. The accounting practices of a corporation, therefore, may
have been influenced not only by the Commercial Code but also by our Cor-

porate Accounting Principles, and the accounting provisions of the Commercial Code in turn may have been subject to the influence of the Corporate

3
A RETURN ON THE CONFIRMED SETTLEMENT OF ACCOUNTS

Accounting Principles. It should be noted, however, that it is the accounting

practices or settlement of accounts under the Commercial Code that the tax
law has adopted as a social institution for the baqis of calculation of taxable

income. Namely, when there is any sphere where the accounting requirement of the Commercial Code does not concur with that of the Corporate
Accounting Principles, it is the settlement of accounts under the Commercial

Code and not that under the Corporate Accounting Principles that has adirect relationship with the principle of dependence on the confirmed settle-

ment of accounts under the tax law. This point should be c!early understood.

Even when a certain accounting treatment of a corporation is regarded as
improper from the viewpoint of the Corporte Accounting Principles, the tax
law should start from that accounting treatment to arrive at the taxable
income, provided that the treatment is considered to be recognized under theCommercial Code. Even if the treatment is not justified by the CorpQrate
Accounting Principles, the tax law does not directly connect with the Corporate Accounting Principles without taking the interpretation of the Com-

mercial Code into consideratiQn. Misunderstandings on this point havegiven rise to a host of attacks-which should have been directed to theaccounting provisions of the Commercial Code-on the tax law.
In short, the settlement of accounts of a corporation is made because of

its necessity to the Commercial Code before that of income tax purposes.
The calculation of the taxable income should accept the result of the settle-

ment of accounts as its starting point, and the special accounting treatment

necessary for the computation of taxable income should not be included inaccounting practices or the settlement of accounts of a corporation.

II
Our Corporation Tax Law determines the taxable income relying upon
the confirmed settlement of accounts. There are three kinds of cases, theyare (1) items whose figures included in the confirmed settlement of accounts
are also used without modification for the purpose of calculation of taxable

income, (2) items whose figures in the closed accounts are allowed to bemodified to calculate taxable income, and (3) items whose fiigures in theclosed accounts are forced to be modified for the determination of taxable
income. These adjustments or modifications are made in a return, so thatthe above-mentioned items can be grouped into the following three classes
from the standpoint of "the adjustment in a return", namely (1) unadjustable
items, (2) adjustable items and (3) items to be adjusted.

SUSUMU WATANABE

4(1) As to unadjustable items, amounts shown in the settlement ofaccounts are used as they are for the determination of the taxable income andare not allowed to be changed. The following two kinds of cases belong tothis group.

(A) When there are two or more proper accounting methods anda
choice is allowed, the method used in the confirmed settlement of accounts
must also be applied to the calculation of the taxable income. This is statedin the Notification conceming the Trea'tment of the Corporation Tax Law

as follows.

When with respect to items relating to the computation of income of acorporation (excluding items subject to special provisions in the tax law for

the computation of income) there are two or more accounting methods which
are recognized as appropriate for the determination of the business profit by

the Commercial Code or other regulations concerning corporate accounting
and by the generally accepted proper principles of business accounting andwhich are also regarded as reasonable for the calculation of the taxable in-come (including those methods which are regarded as proper for the computation of business income and become reasonable for the determination of
taxable income provided that the necessary adjustments are made in a return),

and when the corporation has applied one of these methods in the computation of the business profit approved by the general meeting of shareholders,
the same method should be applied in computing the amount of the taxable
income. In this case, threrfore, the following results would follow.

(a) Even when a return is filed using a different method in computing
the taxable income from that used in the settlement of accounts, or evenwhen a request for rectification or an appeal of dissatisfaction is made on the

ground that a different method should have been applied, the application of
the different method does not come to be recognized in computing the taxable
income of the business year.

(b) When a method used by a corporation comes to be recognized as
proper or reasonable on condition that it is consistently applied every business

year, that method should also be consistently used for the computation of thetaxable income of each business year, except when there in a reasonableexcuse to justify a change in method.

In short it is required that where these are two or more appropriate
accounting methods and corporation has selected one of them in the settlement of accounts, the same method should be applied for income tax purposes, too, and that when the consistent use of a method in called for, the5
A RETURN ON THE CONFIRMED SETTLEMENT OF ACCOUNTS

same method should continue to be applied. These claims of the tax law areso natural that there is no reason to recognize for tax purposes the use ofother methods than those applied in the confirmed settlement of accounts.

(B) Where the determination of the amount of an item leaves room
for selection on the part of a corporation under the tax law, the amountshown in the confirmed settlement of accounts is taken to be an expressionof the company and the same amount is used for the computation of the tax-

able income. To take an example, the tax law stipulates the maximum
limits of depreciation allowable as expenses, and a company is allowed toinclude in deductions any amount within the maximum limit as depreciation
expense. And as to the amount which is to be credited to various kinds ofallowances and to be included in expenses for tax purposes, the tax law only
sets the maximum limits for them. A corporation may decide, as occasion
demands, the amount to be credited to allowances within the maximum limits.
(As the tax law sets uniform limitations in computing allowable depreciation
charges as well as credits to allowances, the problem arises as to whether thesemaximum limits may be more or less than necessary for individual business,
which, however, only means that these maximum limits must be most properly

decided taxwise and not that the principle of dependence on the confirmed
settlement of accounts as such is open to criticism.) The law requires these
item to be treated as expenses in a corporation's accounts, namely, to be includ-ed in expenses or Iosses in the confirmed settlement of accounts (The
Corporation Tax Law g2-26). For instance, the depreciation allowable as adeduction in computing the taxable income of each business year is that partof the depreciation treated as an expense of the year by a corporation within

the limit calculated according to the provision of the Corporation Tax
Ordinance.
In these cases, the amounts treated as expenses in the confirmed settlement of accounts are regarded as expressing the final intention of a corporation.

Here we find no reason to recognize for income tax purposes different amounts

from those in the confirmed settlement of accounts. There is no question as
to the existence of such items as the tax law observes the decided intention ofa corporation in the confirmed settlement of accounts.

However, in cases of governmental subsidies, gains on insurance claimsetc., the tax law allows a corporation to treat them as expenses or losses using"the reduced entry" or making a credit to a special allowance. In these cases
it is doubtful whether it is proper to require that they be recorded as expenses(or losses) in business accounting, because the settlement of accounts are

SUSUMU WATANABE

6

primarily made for the purpose of the Commercial Code and if it is not intend-

ed by the Commercial Code to treat them as expenses (or losses), such ademand will be an improper interference of the tax law with businessaccounting. Yet at present, the understanding from the viewpoint of theCommercial Code concerning acquisition prices of property in cases of governmental subsidies, gains on insurance claims, exchange of fixed assets and soforth is not clear and this problem remains to be reviewed and solved in the
fututre.

(2) Adjustable items mean those items which may be adjusted in a
return. For instance, the provision of excluding dividends received by a cor-poration from revenues may only be applied to a case where a final returnshows both the amounts of dividends to be excluded from revenues and thedetails of its computation. And the amount to be excluded from revenues islimited by the amount so stated in a return (The Corporation Tax Law g23(4)). Substantially the same provisions were found on tax-exemption of in-come from the manufacture of new staple commodities. These items arenaturally a part of the business income, and they are shown as such in theconfirmed settlement of accounts.

The tax law allows these items included in the cohfirmed settlement ofaccounts to be adjusted in a return, taking those adjustments in a return to be

an expression of the intention to have the provision of excluding them fromrevenues or of tax-exemption applied. In other words, the prescription of exclusion from revenues or tax-exemption is applied to these not automaticallybut on condition that adjustments have been made in a return.

(3) Items to be adjusted are those whose amounts in the confirmed settlement of accounts must be adjusted without fail for income tax purposes.

(A) When the tax law expressly stipulates the exclusion of an item fromexpenses (or losses) or sets limit on the amount of an item includable inexpenses (or Iosses) and a treatment not conforming to the stipulation has
been made in the confirmed settlement of accounts, an adjustment should bemade in a retum. To take an example, the tax law excludes penalties andfines from expenses or losses (The Corporation Tax Law g38-(2)-5). If a
corporation, therefore, treated these items as expenses in the settlement ofaccounts, an adjustment should be made in a return. Further, various kindsof allowances are limited in their maximum amounts, so that when a corpra-tion has credited more than the limit, the excess must not be included in
expenses for income tax purposes, leading to an adjustment in a return. It isquite free to treat penalties or fines as expenses or to set an allowance in excess

7
A RETURN ON THE CONFIRMED SETTLEMENT OF ACCOUNTSof the maximum limit prescribed by the tax law in business accounting. A
corporation may treat as expenses the amounts that it thinks are properly
chargeable to the period, and when these amounts are over the limits prescribed by the tax law, the excess will be refused as expenses (or losses) taxwise,

and nothing more.
The tax law demands inventories to be valued on actual costs, stipulating
factors and amounts which should be included in acquisition costs of inventor-

ies. When the compulation of acquisition costs by a corporation does notcomply with the requirements of the tax law, an apportionment of the costvariances must be made in a final return, except when the provision of the
Corporation Tax Ordinance 932-(2) is applied (i.e., when the computed costof inventories manufactured by a corporation is in excess of the amount stipulated by the tax law and yet the cost has been calculated by a proper costaccounting, that cost is regarded taxwise as the acquisition cost of those in-ventories). This case also belongs to category (A).

(B) Even when there are no express stipulations in the tax law, adjustments should be made in a return in order to reflect the true state of affairs,viz., when the closed accounts of a corporation should fail to reflect objective

facts, they must be adjusted to reflect them. For example, in cases where somesales are omitted, fictitious purchases or fictitious debts are recorded or theamount of inventories are undervalued, adjustments are required in a returnfor the purpose of calculating the correct taxable income. These mattersshould have already been properly adjusted and made correct in the settlementof accounts, but, if not, they should be adjusted in a return.

Those matters explained in (3) (B) are different in nature from those
explained above from (1) to (3) (A), in the sense that the latter consists ofcorrect figures before adjustments are made. At any rate, in cases (3) (A)and (3)(B) adjustments should be made, otherwise, they are subject to rectification by tax authorities.

III
Article 62 of the Corporation Tax Law stipulates that when the revenues
and expenses on all the installment sales of inventories made in a given year
have been calcutated adopting the installment basis prescribed in the Corpora-tion Tax Ordinance and shown in the confirmed settlement of accounts, theamounts of the revenues and expenses so calculated are treated as revenues
and expenses in the computation of the taxable income. By this sentence, it
seems that the only recognized method taxwise is to show separately revenues

SUSUMU WATANABE

8and expenses of that year concerning the installment sales. But besides thismethod, the procedure of deferring the profit or loss on installment sales as

unrealized and transferring that part of the unrealized profit or loss whichcorresponds to the amount of receivables due within the year to a realized
profit or loss of the year, is also recognized by the Notification concerning theTreatment of the Corporation Tax Law. This method, however, has nothing
to do with the adjustment in a return. It is recognized as a bookkeeping
method concerning installment sales.

As to the adjustment in a return, the Notification concerning the Treatment of the Corporation Tax Law states as follows :When a corporation applies Article 62 of the Corporation Tax Law(stipulating the year to which revenues and expenses on installment sales
belong) in recording the revenues and the expenses on installment sales ofinventories, the revenues and the expenses on all the installment sales of inventories in a given year should be calculated using the installment basis pre-scribed in Article 119 of the Corporation Tax Ordinance and shown in theconfirmed settlement of accounts. But even if the accounting method ofrecording these revenues and expenses used by a corporation in its confirmed
settlement of accounts should differ from that prescribed in that article, a
corporation is able to apply Article 62 of the Corporation Tax Law on condition that it should make adjustments in a final return in order to bring about
the coincidence, in cases where the difference occurs from the following causes
and the like.

(1) A corporation took the method in which any selling commission incomputing profits or losses on installment sales is not deducted.

(2) A corporation took the method in which only the amount of thereceivables due within the business year but not the amount of money received
before the due date is taken into account, in calculating the revenues andexpenses on installment sales.

The installment basis under the tax law is not same as the collection basis
but a mixture of the collection basis and "the due date basis".

The above ruling is quite proper in that it recognizes an adjustment in a
return in some cases where the installment basis prescribed in Article 119 of

the Corporation Tax Ordinance is not used in the confirmed settlement ofaccounts. In this case, the accounting method of a corporation "is regarded
as proper for the computation of business income and becomes reasonable forthe determination of taxable income provided that the necessary adjustments
are made in a return". But not all the methods differing from Article 119 of

OF ACCOUNTSSETTLEMENTA RETURN
ONTHECONFIRMED
the Corporation Tax Ordinance can find its way to an adjustment, but therequirement here is that "in cases where the difference occurs from the fol-lowing causes and the like". Perhaps it will be necessary that such an
accounting method as is recognized as appropriate under the generally accept--

ed proper accounting principles be used. But how about the case when themethod used in the confirmed settlement of accounts is based on only themoney received within the business year but does not take into account theamount of receivables due but not yet received. This case is not specificallyreferred to as adjustable ina return, but we think that the adjustment in a
return is allowed in this case as coming under "the following causes and thelike". An explanation is made that the reason why such a case has not been
specifically cited is that in reality no corporation adopts such an accounting
method, viz., it is said that the pure collection basis cannot be found in accounting practices in Japan. If so, the situation is serious, because it is anevidence that accounting methods under the tax law have a greater influence

over the practice of accounting than necessary, and other proper methods•
have not gained a firm foothold yet. This tendency should be amended sothat the confirmed settlement of accounts based on the generally accepted
method should be recognized as a starting-point for the computation of thetaxable income, and the requirements for the tax accounting should be
fulfilled in a return.

9

11

REGIONAL INDUSTRIAL DEVELOPMENT
PROBLEMS OF
RELATING TO NATIONAL PLANNING IN JAPAN
Minoru BEIKA

I
The present regional development policy by the Government was formed
relative to the national plan whose aim is to double the national income withina ten-year period starting from 1961. The objective of the development
policy is to prevent excessive concentration of industrial activities in the three

central metropolitan regions of Tokyo, Osaka, Nagoya and their surroundings, and to reduce the considerable difference in the per-head income in all

regions in the country, through industrialization of the underdeveloped
districts. The Governrnent has selected 14 new industrial development
districts, separate from the central districts, and 6 special industrial districts

adjoining the central districts. Because of the recent rapid urbanization due

to high industrialization, trathc congestion, disorganized landuse, and manyother dificult economic and social problems in the centra} metropolitan
regions have occurred. In the original plan only five or six districts were
expected to be preferentially helped by government finance, tax reduction or
exemption, and more public investment, but because of political pressure theoriginal plan was distorted. Since, half of the planned ten years haveelapsed.

The actual results for these five years have shown a distinctive situation,different from the regional development policy. The relative share of industrial activities in the central metropolitan regions have further increased.

much more than in the other local regions. The working forces have moved
from the local districts to the central districts. We have been contronted byproblems caused by the excessively high density of population in the central
districts and of the excessively low density in the local districts. Therefore

the existing policy for regional development must be reexamined now, tofurther the chances for the new economic five-year national plan stating from
1967.

II
The interim report for the reexamination of actual regional industrializa-

MINORU BEIKA

12

tion was recently published by the Economic Planning Department of theGovernment. Some important points of the interim report will be discussed
here and then the writer will approach the problems of regional industrialization more deeply than the report.
Based on the report, the industries can be classified in to two kinds; thestationery (foot-tight) industries and the foot-loose industries. The former,
depend chiefly on special location factors, that is seaside oriented, material-

oriented, energy-oriented or some other special-factor-oriented, and so theirindustrial plants have located not only in the central industrial districts, butalso in some of the new industrial development districts which have been
designated for this purpose, due to their location factors. The iron and steel,

petrochemical, wooden, pulp and paper, and ship building industries belong
to this type of industries, and most of them are found in the coastal regions.

The latter, foot-loose industries, in the case of Japan, have concentrated

chiefly in a few central industrial districts. The engineering, electric ma-chinery and electronic industries which have had enormous growth recently
belong to this type of industries. The plants belonging to the foot-loose
industries, originally could be located relatively freely in any district, because

they are high-added value industries and have relatively high transportability.

But in Japan, these industries depend especially on their own agglomeration
and related industries and tend to situate in certain areas which are in thecentral metroplitan regions.

These recent tendencies seemingly will continue in the near future, too.

Therefore we can certainly expect to be confronted by more economic andsocial problems, that of urbanization in the central districts and underdevelopment in other local districts where the foot-loose industries can not

be attracted. The present regional development policy has been a little too
idealistic for actual industrial activities and real regionai conditions. The
decentralization of industries could not be realized as well as was expected.

Accordingly, the interim report has failed to include a revised policy ofmore realistic approach for the improvement of the present dithcult situationin regional development, It is now being studied by a working group of the

Economic Planning Department.
III
Two opinions have been expressed for approaching these diflicult regional

problems. One is to place importance on actual tendencies and thus gradually to decentralize industrial activities from the central districts to thier sur-

PROBLEMS OF REGIONAL INDUSTRIAL DEVELOPMENT 13
RELATING TO NATIONAL PLANNING IN JAPANroundings, and to endeavour not only to develop surburban districts, but also to
redevelop urban districts of the central districts, according to plan. The other

opinion is to emphasise the regional difference of per-head income, and theimportance of solving the underdevelopment problems in the low income
regions as before. Relating to the controversy between the two opinions, thewriter has been interested in many experiences of regional development by
European and American countries and some of the underdeveloped countries,
after World War II.

The United Kingdom had been confronted with complicated regional
problems of more ethciently developing industries in this competitive world

and of solving the severe unemployment in the depressed areas of northern
England and Scotland. France has greatly developed her industries chiefly inthe central and the eastern regions near the EEC developing countries, whileat the same time, she has regional development problems to be found in thesouthwest and western part of the country. Even the United States of America which has had continued prosperity 60 months from 1961, has a considerable number of depressed areas affected by technical innovation, and hastaken strenuous policies for these regional problems, since the last half of the1950's.

We can find similar cases in other underdeveloped countries, for example

lndia and Brazil. Brazil has been endeavouring to industrialize her country
but is still confronted with severe regional problems. The northeastern partof Brazil has an excessive population, most of which are very poor. There.
fore the government has made great efforts for relieving people from poverty
in the northeast through local industrialization, while eflicient industrializationof the whole country in the competitive industrial market, has been the essential objective for Brazil.

As has been observed, many countries have worked hard to overcome
these severe regional problems in confiict with each other. Their solution is

not simple. The policy makers in Japan must also look for complex means
to attain both a national higher industrialization and a leveling up of low
income regions, based on current actual conditions.

IV
The excessive concentration of industrial activities and the rapid urbani-

zation in the three metropolitan regions have brought about new physicalexperiments for economic and social development and redevelopment, sincethese urban and suburban problems should not be neglected even for a short

14

MINORU BEIKA

time. Planned industrial estates have gradually promoted industrial decentra-

lization from urban to suburban and other outer districts, and some flatted
factories, now under plan, would be useful for small industrial firms which

can not move outside the urban districts because of their proper economic
function or location factors. New towns, including industrial estates, shouldbe planned soon, although some new towns have already been constructed
exclusivey for residential use. Projects of urban renewal, evenif very gradual-

ly, have been advanced by the construction of new shopping centers, transportation terminals or other urban facilities. Air and water pollution andother industrial nuisances which have been greatly increased by rapid industrial

development, have been challenged by central and local governments, andindustrial enterprises. Legal control for industrial location and industrial

nuisances have been partly reinforced and partly established in response toactual circumstances, and the importance of land use planning and regional

planning has been gradually recognized by the general public. The topmanagement of business enterprises have also emphasized their social responsibilities, including regional problems, such as location selection, industrial

nuisances and community relations.
The present difllcult urban problems are expected to be settled one by one
by these public and private problem-conscious activities, although the experi-ments shown here, have not clear been found as general tendencies and mostof the urban problems have not yet been attacked.

The writer believes that a flash of hope for advancing realistic regional
development can be found in the case of the central industrial districts due tosevere problems within itself, as stated above. Many kinds of techniques forregional development, economic, social, and physical, have been introduced
through European and American experiences, especially since World War II

and some of them have been adapted or newly created for our particular
circumstances. The keypoint is how to integrate these techniques of regional

development for cooperative activities by the many groups of public andprivate parties concerned. It needs, so to speak, a systematical approach tointegrate these development activities. This is the most importantpointin
Japan, since Japan has not had a long experience in regional problems as thatof European and American countries, which have had many cases of trial andterror experiments for landuse, control of industrial nuisances, city planning,urban renewal, and other regional development.

PROBLEMS OF REGIONAL INDUSTRIAL DEVELOPMENT 15
RELATING TO NATIONAL PLANNING IN JAPANv
As stated above, we may expect urban problems to be settled gradually.
But it seems now that effective means to diminish the regional income differences or to level up the underdeveloped regions have not yet been establishedsuMciently, inspite of the present regional development policy to do so.

The regional difference of the many economic activities has been analysed
statistically, and the frame-work by respective regions has been established byeconometric approach, evenif only roughly. Local self-governments in under-

developed regions have endeavoured to induce effective industrial plants todiminish their differences by these analysis. These industries chiefly belong

to the apparatus industries; iron and steel or petrochemical industrial complexes. The expectation has been realized in a few districts, but not in mostof the other districts, since the national balance of demand and supply for acertain period has naturally checked these big projects of new plant construction. These so-called foot-tight industries would be very useful for regional
industrialization for longer range periods, but not always for limited periods.

So we must discover more effective means for these regional problems.

Fundamentally, government financial systems and local tax systems
should be revised effectively to adapt to realistic conditions, relating to thedesired regional development, because many local self-governments haveendeavoured to induce Iarge-sized apparatus industries or industrial complexes

in stereotypeform, disregarding their own location factors and the nationalbalance of demand and supply and so not a few of them have failed to do so.
It is reasonable to analyze once more the regional characteristics relating toindustrial development, theoretically and realistically.

Now industries have been contronted with severe international competition on the one hand, and have been internally expected to promote industrial

development in low income regions economically and socially on the otherhand. Therefore industrial regional development should be realisticallyapproached on the basis of the logic of industrial location.

From this view point, three types of industries are grouped for regional
development, especially the decentralization of industrial activities in Japan.
They are foot-tight industries, local market-center-oriented industries and footloose industries.

1) Thefoot-tightindustries
The foot-tight industries depend on certain location factors and so aresituated in certain local districts which have these factors, as stated before.
They are some of the most leading industries for industrialization in the local

16

MINORU BEIKA

districts. But they have two problems.

One problem is that of limitation by the national balance of demand andsupply. It has been shown before. The second point is that apparatus industries are basic or preliminary process industries and not assembly industries.

Apparatus industries are not accompanied by so many plants of other relatedindustries as assembly or later process industries. Because of this the finishedproduct industries, consumer and producer goods, should promote and induce
more related industries than the preliminary process industries in the present

market mechanism. In other words, backward integration of industries arefound more in the competitive market than in foreward integration. For thisreason, a few new industrial districts have succeeded in industrialization by
the type of foot-tight industries, but have few multiplier effects throughrelated industries.

2) The local market-center oriented industries.
This type of industries has not yet been well recognized for their use inlocal industrialization in Japan generally. But a realistic analysis has shown

their effectiveness. The increasingbuying power has promoted this tendencies,

year to year and the local markets have gradually grown larger. More industries have been changed to mass production types, and their markets been
made more competitive by a few manufacturers. They have had to pay attention and serve their local market customers. A considerable number of theseindustrial plants, which are middle-sized, and belong to relatively large-sized
firms, have been established in central cities in local districts during these lastten years. They have contributed to industrialization in local districts, though

their contribution to local districts have not been so large as to diminish theregional income difference by specific figures. This is one method of frontal

attack to regional development for the time being. But this method has been
inclined to be overlooked now by the policy makers.
3) The foot-loose industries.
Foot-loose industries originally could be decentralized to relatively wider
fields, due to their locational flexibility. But the foot-loose industries in Japan

have concentrated characteristically in the three central industrial districts asstatedbefore. Is this unavoidable by the logic of industrial location? Wefind the decentralization of this type of industries in European and Americancountries. We will give a few more defails of actual regional industrialization in Japan.

We can find three points of possibilities of industrial movement or decentralization in the foot-loose industries. The first key is found in the fact that

PROBLEMS OF REGIONAL INDUSTRIAL DEVELOPMENT 17
RELATING TO NATIONAL PLANNING IN JAPANnew industrial development has been realized more in the environmental parts
than in the central parts of the industrial districts. The second key is that thebusiness policies of exceptionally located industries, have been found in local

districts, distant from the central districts. The third key is found in theoriginally "foot-loose" factor. In other words, it is expected that businessfeatures of the foot-loose industries in Japan can be changed by their busines
policies for decentralization. The foot-loose industries will be analysed morein detail as follows.

VI
The representative parts of the foot-loose industries are mechanical engineering, electric machinery, electronics, and precision industries from thestandpoint of the present regional development problems. In Japan, theseindustries have been concentrated in the three metropolitan regions and seemto depend on the agglomeration of related industries and with each other.
Therefore they tend to decentralize gradually, only through regional expansion because of the result of land use competition in the central parts.
Naturally it is very diflicult for these regional expansions to maintain reason-

able landuse in the suburban and surrounding districts, though natural expan-

sion contributes to regional industrial development move or less. Comprehensive regional planning, economic, social, and physical, is indispensable
in these suburban and gurrouding districts. In these cases, planned industrial
estates or industrial parks are very useful for the desired industrial develop-

ment. These planned estates, so to speak, are multi-purpose devices for
economic, social, and physical development in certain districts. But desiredland-use in the suburban and surrounding districts can not always be attained

through this type of estates only. Comprehensive planning should be indis-

pensable for economic and social development. The development of thesetypes of industrial estates tend to bring about new town planning or communi-ty planning, as we can find in the experiences in Britain and the U.S.A.
Actually, aside from the problem of regional industrialization we are also
confronted with disorganized laud-use due to housing problems, especially theincreasing number of inferior-quality houses, in the suburban and outlying
parts of the central regions.

In short, an industrial development policy in surrounding districts forrelieving the excessive concentration in the central distiricts should not bringout similar disorganized land-use in surrounding districts as in the central
districts.

MINORU BEIKA

18

The most dificult problem is the industrial development of local lowincome districts, relatively remote from the central districts. It is unreasonable

that these problems should depend exclussively on industrial development.
But industrial development should also be sought for as much as possible since

it will bring about strong community-feeling. How to develop industries andwhich field is more suitable are also important points.

We can find a considerable number of newly growing industrial firms inlocal districts, which have developed from private or family-owned businesstypes to larger industrial enterprise types, developing new business fields basedon industrial innovation. These types of industrial firms have developed
entirely in the local market in the preliminary stage and then have enlarged
their market beyond their locality. The policy makers of regional development should find these growing firms and take good care of the nucleus energy

in their local community. Though this energy can not be uncovered by arough statistical approach, this energy is very important in the dynamic
approach to regional development problems.
Are there any other effective ways for local industrialization? Somemethod could, even-if very diMcult, be found with the condition of cooperation

between the central and local governments and industrial firms. Actually asmall number of middle-sized plants in some kinds of foot-loose industries havedeveloped in some local districts, remote from the central districts. These
industrial firms have started their own peculiar business policies, overcoming
the defects of their location factors which are situated at a long distance fromthe central districts. Public assistance will promote the development of thistype of industries. Of course the deeper concerns of business management are
indispensable from the standpoint of a wider range social responsibility. These
creative business policies are related to business and industrial innovations.
The foot-loose industries in Japan bound tight in the central districts, will beable to disperse to wider districts by a more creative management.

VII
The leveling up of underdeveloped districts is the remaining and lessanswerable problem, while the excessive concentration problem in the three
central metropolitan regions can be expected to be solved gradually, as statedhere. The leveling-up problem can be approached more or less by somemeans of industrial development. But the problem should be more fundamenta11y and realistically grasped by the policy makers. The target of regional
difference in per-head income and other economic activities is theoretical and19
PROBLEMS OF REGIONAL INDUSTRIAL DEVELOPMENT
RELATING TO NATIONAL PLANNING IN JAPAN

comprehensive, but is not enough to actuate effective development activities.

Actually there are some cases in which people in underdeveloped districts
do not always feel the incovenience realistically inspite of their considerable

low income as can be grasped statistically. And yet the low standard of theirliving is a realistic problem. Now in Japan, we should reexamine the actual
conditions and try to find more effective means of solving the problems throughrealistic and theoretical analysis. This is the present stage of regional
industrial development in Japan.

21

THEDEVELOPMENT OF JAPANESE TRADE WITH
THE BRITISH COMMONWEALTH IN ASIA
Fukuo KAWATAI
By the British Commonwealth in Asia we designate the six countries, ofHong Kong, Malaysia, Singapore, India, Pakistari and Ceylon, In this article
we shall deal with the recent development of Japanese trade with these countries. We have limited our study to the period between 1958 and 1965.
At first we shall examine the ratio of Japanese export to this area to her

total export. The ratio which was 12% in 1934-36, went up to 20% in 1950,
but came down to 10% in 1965. The highest record of 25% was registeredin 1952, the year immediately following the Korean War. After that year
the ratio tended to decline owing partly to the import restiction against Japan-

ese commodities in the sterling area and partly to the slowdown of the Korean
War Room, declining to only 10% in 1959. Later the ratio recovered a little,

and has remained at the level of 11 or 12% since 1960. The amount of export
to this area which was only 165 million dollars in 1950, suddenly jumped to
316 million dollars in 1952, but in 1953 it fell down to 158 million dollars, half

the amount of the previous year. The amount gradually recovered, reaching
the level of 300 million dollars in 1955, of 400 million dollars in 1960, of 500

million dollars in 1962, of 600 million dollars in 1963, of 700 million dollars
in 1964 and of 800 million dollars in 1965. (See table 1)

Table 1. Japanese Export to the British Commonwealth in Asia
(unit : million of U. S. dollars)

Export Ratio

Total Export ct.Ohlllle.li}l:.tLSIhth ofBto A( ll )in Asia (%)(A) (B)

1934-36 928 110 1219501,255
820 165
20
1951
216
17
1952
1,273
316
25
1953
1,275
158
12
195tl
1,629
243
15
1955 2,OIO 311 16

FUKUO KAWATA

22

1956
2,501
361
l4
1957
2,858
369
13
1958
2,877
333
12
1959
3,457
352
10
1960
4,055
477
12
1961
4,235
485
12
1962
4,916
549
11
1963
5,452
638
12
1964
6,673
766
1965 8,452 816 12
10(Source) Ministry of International Trade and Industry, Nippon Boeki no Tenkai (The

Development of Japan's Foreign Trade) 1956, and "Tsusho-Hakusho" (White
Paper on the International Trade of Japan).
(Note) In the figures of 1936-38, trade with Burma is included.

Next, we shall consider the movement of Japanese import from this area in
relation to her total import.

In prewar years (1934-36 average), Japanese import from this area consisted of 12% of her total import and in the 1950's (except in 1954) it record-

ed 10% or 12%, but in the 1960's the ratio began to decline, and came down

to as low as 6% in 1964 and 1965. The amount of import from this area
which was 100 million dollars in 1950, more than doubled in 1951, and kept
increasing in the following two years. In 1954, the amount of import decreased owing to the tight money po!icy of Japan, but in the following years, theamount increased steadily until it was brought down to 300 mi11ion dollars

again by 1958, when the retrenchment policy was again put into practice.
After that year, import regained its upward movement until 1962, when it
decreased to 433 million dollars by the restrictive credit policy for the third
time. In 1963, the import figure reached the level of 500 million dollars, andmaintained this amount in 1965, although it dipped to 474 million dollars in
1964. (See Table 2). It is noteworthy that the ratio of import from this area
has been declining year by year, although that of export to this area has kept
almost the same level, at least since 1958.

The balance of trade of Japan with this area was positive in 1950 and
1952, but it was negative in 1951 and 1953. Especially, in 1953, the excess ofimport over export reached as high as 120 million dollars. This was due toher rising import demand in spite of the shrinking export owing to the severe

import restrictions carried out in the sterling area. On the contrary, in
1954, the balance turned positive with the decrease of import. The favorable
balance of trade continued until 1965 with the exception of 1957 and 1959.

THE DEVELOPMENT OF JAPANESE TRADE WITH
THE BRITISH COMMONWEALTH IN ASIA
Table 2.

'

Japanese Import from the' British Commonwealth in Asia
(unit : million of U. S. doilars)

Years

Total Import

1934-36
1950
1951
1952
1953
1954

951
974

1955
1956
1957
1958

1959
1960
1661
1962
1963
1964
1965

1,995
2,028
2,410
2,399
2,471
3,230
4,284
3,033
3,600
4,491
5,810
5,637
6,736
7,938
8, 169

Import from the British

The Ratio of B to A

Commonwealth in Asia

(x )(%)

119
100
234
243
278
178
264
346
418
300
395
451
472
433
5ca
474
506

12

10
12
12
12
7
11

11

10
10
11

Same as Table 1(Source)(Note)Same as Table1

noticeable fact that since 1962 the amount of favourable
It is quitealance suddenly inereased and kept on increasing year after year ; 116 millionba
134 million dollars in 1963, 292 million dollars in 1964, anddollars1962,
in

310llionmi dollares in 1965, totalling 852 million dollars in these four years.
of export to this area during the 16-year period of 1950-1965
As the excess
totalled to942 dollars, this amount of 852 million dollars took up 90%
millionof the total.
(See table 3). The ratio of trade balance to export has been
growing larger since 1962, reflecting the increasing export surplus to this area.

Table 3. Japanese Balance of trade with the British Commonwealthin Asia

Balance EX)s%
Export (A)Import (B)(C)-(A)-(B)1934-36 110 119 -19 -10.8

1950 165 100 65 39.4
1951 216 234 -18 -8.3
1952 316 243 73 23.2
1953 158 278 -120 -76.0
1954 243 178 65 26.8

10

8
8
8
6
6

23

FUKUO KAWATA

24

1955 311 26ti 47 15.2
1956369361418
346
4.1
1957
-4915
-13.6
1958353
333395
300
3.9
1959
-4213
-11.9

1960
478
451
27
5.6
1961
486
472
14
2.8
1962 549 433 116 20.2

1963 638 504 134 21.0
196tl 766 474 292 38.I
1965 816 506 310 38.0
(Source) SameasTablel ,(Note) Same as Tablel

II
Formerly, Japanese exports to this area chiefly consisted of iight industrial

goods, such as cotton manufactures but in recent years, the composition ofcommodities has changed remarkably. The share of light industrial products

decreased, while that of machinery increased. This signifies the changing
pattern of demand in this area due to the progress of industrialization. 'Table 4 shows how the commodity composition of Japanese exports tothis area changed during the period in question,

Table 4. Commodity Composition of Japanese Exports
to the British Commonwealth in Asia (%)
SITC

Code
o.

L
2.
3.
4.
5.
6.
7.
8.

9.

1958

1963

1965

6

3

2

2

8

8

chiefly by materia]s 68

48

45

Machinery 14

31

35

manufactured articles 6

7

6

Foodstuff 5

Beverage and Tobacco Raw materials
excluding fuels

1

Mineral fuels -Oil and Fat l

Chemicals 5
Manufactured goods classified

Miscellaneous

Others- loo loo
Total loo!

{ egyed.ia.m,gllion of (333) (63s) (si6)(Sources)

Same as Table 1, and Nippon Boeki Geppyo (Japan Exports and Imports),
Dec. 1965.

THE DEVELOPMENT OF JAPANESE TRADE WITH
THE BRITISH COMMONWEALTH IN ASIA
The commodity pattern of Japanese import from this area is characterized

by the predominant position of raw materials amounting to 80% of the total
import. Recent changes in the pattern are noticed in the increase of the shareof manufactured goods classified chiefly by materials and in the decrease in theshare of raw materials and mineral fuels.

The increase in the percentage of manufactured goods implies the advanceof industrialization in this area.

Table 5.

Commodity Composition of Japanese Imports
from the British Commonwealth in Asia
(%)

SITC

1958

1963

1965

1

6

4

excluding fuels

81

eo

76

Mineral fuels

12

4

5

Chemicals

1

1

1

6;

Manufactured goods classified
chiefly by materials

5

9

13

7.

Machinery

Code
o.
1.
2.
3.
4.
5.

8.

9.

Foodstuff

Beverage and Tobacco
Raw materials

Oil and Fat

Miscellaneous

Others Total(Value in million of
U. S. dollars)(Sources)1

manufactured articles -

100

100

100

(300)

(504)

(506)

Same as Table 4.

Now let us examine the recent development of Japanese trade with individual
countries in this area.

1. HongKong
Japanese trade with Hong Kong has always registered an expDrt surplus.
Moreover, the surplus is so large that the ratio of trade balance to export isthe largest in this area, registering 87.5% between 1958 and 1965.

The principal export commodities to Hong Kong are textiles, machinery,and metals. These three kinds of articles take up about two thirds of the total.

Of textiles, cotton fabrics are the largest in value, but woolen yarns andsynthetic fibre fabrics have made a remarkable expansion in recent years.

For example the value for woollen yarns has increased twelve times andfor synthetic fibre fabrics forty times between 1958 and 1965.

Of machinery exported to Hong Kong, electrical machines have accounted

25

FUKUO KAWATA

26

for about 60% of all machinery in recent years.

Of metals, iron and steel, and of chemicals, artificial plastics are mostimportant. As to imports from Hong Kong, foodstuff, such as fish, and metal

scrap, such as iron and non-ferrous metal scrap are important, but recently
precious and semi-precious stones have made a marked increase.
Table 6.

Japanese Trade with Hong Kong(in miliion of U.

S. dollars)

Export (A)Import (B)Balance (C)

12

1961

100
129
156
154

88
102
133
130
173
217
263
253

1958
1959
1960

27
23
24

1962

192

19

1963

246

1964

292

1965

288

29
29
35

(-X-)%
88.0
79. 2

85.2
84.4
90.0
88.2
90.0
87.7

1958-1965 1,5ss 198 1,360 87.5
(Sources) Ministry of International Trade and Industry, "Tsusho Hakusho"(White Paper on the International Trade of Japan)(Note) Figures do not add up due to rounding.

Table 7. Japanese Export Commodites to Hong Kong(in million of U. S. dollars)

Total

1958

1959

1960

1961

1962

1963

1964

1665

100

129

156

154

192

246

292

288

Textiles

48

57

67

58

77

89

104

100

(cotton fabrics)

(24)

(29)

(28)

(24)

(29)

(26)

(28)

(26)

(woolen yarns)

(1)

(2)

(3)

(3)

(8)

(12)

(16)

(17)

(O.4)

(O.4)

(1)

(-)

(7)

(14)

(15)

(14)

(?X,n,tl,e,tic fibre )Machinery

11

17

29

26

29

48

58

53

(general)

(3)
(3)
(4)
(1)
8
(5)
5
(2)

(8)
(7)

(14)

(1)

(8)

(10)

(18)

(16)

(10)

(13)

(17)

(25)

(32)

(31)

(O.4)

(2)
(3)

(4)
(3)

(4)
(4)

(14)

(10)

(9)

(5)

(7)

(10)

10

11

22

32

(6)
7
(3)

(7)

(16)

(3tl)

39
(28)

(28)

11

15

25

(8)

21
(12)

24

(4)

(14)

(15)

(electric)(transportation)(precision)

Metals(iron & steel)

Chemicals(artificial plastics)(Sources)

Same as Table 6.

(2)
7
(3)
6
(3)

43

THE DEVELOPMENT OF JAPANESE TRADE WITH
THE BRITISH COMMONWEALTH IN ASIA
Table 8.

Japanese Import Commodities from Hong Kong(in million of U. S. dollars)
1958

1959

1960

1961

1962

1963

1964

1965

Total

12

27

23

Foodstuff

O.1
(-)

O.2
(-)

O.4
(-)

24
1

19
1

29
6

29
4

35
7

(O.6)

(O.9)

(5)

(4)

(6)

(fish)

Raw Materials

11

25

21

19

7

13

13

12

(scrap iron)

(4)

(11)

(13)

(12)

(4)

(5)

(5)

(4)

(ftO.",'.fter,r,O,".S,)

(3)

(9)

(4)

(4)

(3)

(4)

(4)

(3)

Same as Table 6.

(Sources)

2. Malaysia
Japanese trade with Malaysia recorded negative balances throughout thewhole period. Moreover the amount of import from Malaysia was far greaterthan that of export to this country, so much so that the import surplus was
extremely large. This is one of the features of Japanese trade with Malaysia.
The ratio of trade balance to export has, however, been decreasing in terms ofabsolute number during this period owing to the increase of export.

(See Table 9).
Table 9.

Japanese Trade with Malaysia(in million of U. S. dollar)

1958
1959

1960
1961
1962

1963
196zl

1965

ExportImportBalance

(A)
14
21
34
35
44
56
59
75

(B)
159

(c)

1958-65 338

8,,(%)-1035.0

270
256
263

-145
-202
-237
-265
-237
-214
-197
-188

2,021

-1,683-496.0

223
271

298
281

-966.0-700,O-752.0-540.0-382.0-334.0-250.0(Sources) Same as Table 6.

(Note) Same as Table6.
The principal exports to Malaysia are machinery and metals. These twoitems aceounted for more than sixty per cent in 1965.

Next come foodsuff, textiles and chemicals, but their amounts are not solarge. (See Table 10).

27

FUKUO KAWATA

os

Table 10. Export Commodities to Malaysia(in million of U.

S. dollars)

1958

1959

1960

1961

1962

1963

1964

1965

Total
1. Machinery

r4
2

21
5

sa
9

35
9

44
12

56
!9

59
24

75
27

(2)
(2)
(5)

(3)
(2)
(4)

(4)
(3)
(5)

(9)
(5)
(6)

(7)
(7)
(9)

(9)
(8)
(11)
(O.5)

(general)(O.8)(electric)(O. 5)(transportation)(preclsion)

(O.4)

(1)
(1)
(2)

(O.2)

(O.3)

(O,5)

(O.4)

(O.3)

(O. 5)(O. 5)

2. Metals

3.3

5

9

7

12

14

15

21

(iron and steel)

(2.6)

(3.4)

(7,5)

(5.4)

(10.3)(11.6)(13.3)(16,3)

L5

2.1

2.7

3.6

3.6

4. Foodstuff(wheat flour)(fish) (o.5)

5. Textile 3.7(cotton fabrics) (O. 9)

(1.3)

(1.0)

4.5

4.5

7.6

(1.6)

(1.5)

(4. 1)

(1.7)

(2.3)

(2.7)

(O. 8)(O. 9)

3.8

5,3

5.8

4.8

5.7

6.0

6.9

(O. 7)

(l.2)

(1.9)

(2.0)

(1. 9)(2. 1)(2. 4)

6. Chemicals O.5

1.3

L5

2.1

2.7

3.6

3.0

4.2

(artificial plastics) (O. 1)

(O.2)

(O.4)

(O.4)

(O.6)

(O.9)

(1.0)

(1.7)

(Sources) SameasTable6.

Malaysia
consist of raw materials (such as ironJapan's main importsfromore, timber, and natural rubber,) and metals (such as tin).

Iron ore, natural rubber, and tin are imported from the former Federationof Malaya, while timber comes from the former British Borneo. In 1965, timberand iron ore were the two largest commodities, both amounting to more thaneighty million dollars. Natural rubber which was the largest item in 1958 andin 1959, declined to 18 million dollars in 1965. The amount of tin import
made a considerable inerease from 12 million dollars in 1958 to 52 million
dollars in 1965. (See table 11).

Table 11. ImportCommoditiesfromMalaysia(in million of U. S. dollars)

1959 1960 1961

1962 1963 1964 1965

Raw materials 119.7

223.4 271.1 297.6
184.9 222.0 242.3

280.6 270.0 256.1 262.5
241.l 229,2 201.9 204.6(iron ore) (3e.9)(50.3) (72.2) (89.5)(timber) (9.9)(21.2) (28.2) (47.0)(84.8) (82.0) (80.4) (81.8)(55.5) (64.3) (66.5) (86.0)(raw rubber) (5tl.1)(71.5) (69.8) (57.6)(50.9) (53.4) (30.8) (18.0)(latex) (7.7)(13.1) (14.3) (12.2)(11.6) (9.4) (7.9) (6.4)

1958

Total 159.3

Metals(tin)' (12.2)(Sources) Same as Table6.

(17.4) (23.5) (25.4) (7.7) (32.6) (48.6) (52.1)

THE DEVELOPMENT OF JAPANESE TRADE WITH 29
THE BRITISH COMMONWEALTH IN ASIA

3. Singapore
In contrast to Malaysia, Singapore is, like Hong Kong, an export surplus
rnarket for Japan. Japanese export to this country is always larger than her
import. The ratio of trade balance to export was about 74% in 1965, although

it was 84% in 1958 and 88% in 1959.

The average ratio during the period 1958-1965 was 78.4%. This issecond only to that of Hong Kong.

Table 12. Japanese Trade with Singapore(in rnillion of U. S. dollars)

Export Import Balance [.B%(B) (C) =- (A- (B)(A)

1958 77 13 64 83.6
1959 87
7513
9 66
88.0
1960
74
84.5
1961 102 25 77 75.8
1962 105 23 82 78.4
1963 112 22 90 80.0
1964 114 27 87 76.6
1965 124 33 91 73.6

1958-65 796 169 627 78.4

(Sources) Sarne as Table 6.

(Note) Same as Table 6.
Principal exports to Singapore are textiles, metals, and machinery.
0f textiles, cotton fabrics were the leading articles in 1958, but in 1964
and in 1965, synthetic fibre goods ranked first, outstripping cotton fabrics.

Metals came next, machinery ranking third. The main categories ofmachinery were electric and general. (See table 13).

Table 13. Export Commodities to Singapore(in million of U. S. dollars)

1958 1959 1960 1961 1962 1963 1964 1965
Total 77.2 75.3 87.0 101.8 105.0 112.0 114.2 124.0
1. Textiles tk4.3 35.4 35.9 47.6 41.4 40.8 3tl.O 34.8
(cottonfabrics) (12,7) (11.7) (16.1) (!9.3) (15.4) (14.0) (8.8) (7.2)(2g.nttih/e.t,iCfibre) (o.3) (o.6) o.3) (-) (6.7) (g.4) (lo.1) 02.g)

2. Metals 8.4 9.1 13.0 12.8 16.8 19.1 20.8 28.1
(ironandsteel) (6.4) (7.0) (10.1) (9.0) (12.9) (15.1) (16.5) (21.6)

3. Machinery 5.8 7.6 10.8 12.0 16.0 19.1 30.6 26.7
(general) (2.1) (2.0) (2.4) (4.4) (3.4) (4.0) (8.1) (8.4>(electric) (1.5) (2.6) (3.2) (4.8) (7.8) (11.4) (18.9) (15.2)(transportation) (1.1) (1.8) (3.4) (3.0) (4.8) (4.3) (4.5) (4.4)(precision) (1.1) (1.3) (1.9) (2.4) (2.5) (3.2) (2.9) (3.6)

FUKUO KAWATA

30

4. Chemicals 1.8 2.0 2.2 3.2 4.6 5.0 4.8 6.3(artificialplastics) (1.1) (O.8) (1,O) (1.0) (1.8) (2.2) (2.1) (3.1)(Sources) SameasTable6.

Japanese imports from Singapore are chiefly mineral fuels, such as heavy

oil, and raw materials, such as natural rubber and non-ferrous metal scrap.
These two items cover more than 90 per cent of the total amount of imports.
(See table 14).

Table 14, Imports from Singapore(in million of U. S. dol}ars)

1958 1959 1960 1961 1962 1963 1964 1965

Total 12.7 9.0 13.5 24.6 22.7 22.4 26.7 32.7

Mineral fuels 6.9 4.0 9.5 19.8 19.1 16.6 12.5 20.7
(heavyoil) (5.0) (2.2) (Z5) (16.9) (13.8) (11.6) (9.6) (18.9)

Raw materials 3.2 3.4 3.0 3.9 2.6 4.7 12.3 9.9(natural rubber) (O. 2) (O. 2) - - (O. 3) (O. 3) (6. 6) (5. 0)(".O.n,'.fler,r,O,U.Sp) (o.s) (o.s) (o.7) (o.6) (o.7) (1.s) (1.7) (1.4)(Sources) Same as Table 6.

4. India
Japanese trade with India during this period registered an export surplus

except in 1959. The ratio of trade balance to export tended to increase be-

tween 1959 and 1965. This signifies the growing Japanese export to thiscountry relative to her increase of import. (See table 15)
The ratio of balance to export during the period in question is the small-

est in this area, showing 15.4%. This means that the trade of Japan with
India is the best-balanced in this area. (See table 15)

Table 15. Japanese Trade with India(in million of U. S. dallors)
ExportImportBalance(A)(B)(C)-(A)-(B)et](%)

85
76

74
92
1oo
111
93
126
142

11
-16
9
O.2
26
28
47
64

12.0
-21.2
8.5
O.2
24.2
18.0
25.0

1958
1959

1960
1961
1962

109
111
119

1963

154

1964

189
203

1965

1958-65 1,036(Sources) SameasTable6.
(Note) Same as Table 6.

139
877

159

32.0
15.4

THE DEVELOPMENT OF JAPANESE TRADE WITH
THE BRITISH COMMONWEALTH IN ASIA

31

More than half the amount of exports to India has been occupied bymachinery since 1962. 0f machinery exported to this country, general machinery ranked first, followed by transportation and electric machinery.

Next to machinery came metals and chemicals. Although textiles werethe chief exports to India in former days, they are now quite unimportant.
(See table 16)

Table 16. Export Commodities to India(in million of U. S. dollars)

1958 1959 1960 1961 1962 1963 1964 1965
Total

84.8

75.9

108.7

111.1

119.4

153. 7189. 3

203.4

Machinery

23.0

44.1
(22.3)

85.7

98.7

116.8

(10.3)

32.6(14.2)

66. 8(general)

24.0
(7.6)

(29. 0)(21.7)(37.3)(48.3)(electrical)(6.0)(4. 3)(8.0)(9. 2)(17. 1)(22. 9)(24.2)(30. 0)(transportation)(10. 0)(7. 8)(9.2)(12.4)(20. 6)(41. 3)(37. 3)(38. 5)

Metals

4L3

19. 1

55.0

41. 1

27.1

31. 6

55.1

49.0

(iron and steel)(39.5)(16.8)(51.5)(38.3)(24.9)(28.9)(50.8)(38.3)

Chemicals

8.4

20.6

7.0

11. 1

10. 7

23. 6

(5.8)

(16.0)(1. 1)(5. 8)(4.7)

19.1(13.5)

19.3(chemical fertilizer)(11,6)(14.1)

Textiles

6.2

7.8

6.0

8.1

8.3

10.3

7.8

6.2

(1. 6)(1.2)(O. 8)

(1.3)

(1,9)

(2.5)

(3.9)

(3.6)

(sfiYb",".heykirÅëns)(Source) Same as Table 6.

Main import commodities from India are raw materials, such as iron ore,
raw cotton, scrap iron and manganese ore.

Among these, iron ore is the most important item, accounting for about
a half of the amount of raw materials imported from India. (See Table 17)

Table 17. Import Commodities from India(in million of U. S. dollars)

1958 1959 1960 1961 1962 1963 196tS

1965

Total 73.4 92.3 99.5 110.9 93.1 125.6 142.0
Rawmaterials 70.1 s6.0 91.4 99.2 85.0 98.9 112.8

139.0

Iron ore 30.0 30.9 40.5 30.4 37.4 45.6 53.8
Raw cotton 19.7 21.2 12.9 31.2 23.8 24.7 20.6
Scrap iron 3.3 IL3 15.3 18.5 6,5 10.8 12.7

60.2

Manganese ore 3.4 4.8 4.o 6.8 4.4 5.3 9.9

126. 2

2L5
17.4
11.I

(Sources) SameasTable6.

5. Pakistan
Japanese trade with Pakistan between 1960 showed an export

surplus,although in 1958 and 1959, an import surplus was experienced.
The ratio of trade balance to export tended to increase (except

in 1963).

FUKUO KAWATA

32

This means the expansion of export in relation

to import from thiscountry.

(See Table 18)
Table 18.

Japanese trade with Pakistan(in million of U

Export
1958
1959

1960

Import

(A)

(B)

22
25
59
52

sc

Balance(C) =(A)-(B)
-12

32
32

. S. dollars)[Xi(%)-55. 8-7-29. 0

17
23
29

46.4
4tl.O

1962

57

29
pm

1963

47. 8

47.7

O.1

O.2

1964

81
10ti

49
77

61.4

1965

31
27

1961

50. 3

74.4

1958-1965 447 261 186 4I.5

(Sources) SameasTable6.
(Note) Same as Table 6.

More than a half of Japanese exports to Pakistan is taken up by machinery,of which general machines including textile machines are most important.
Between 1958 and 1965, the amount of machinery exported increased about
ninefold.

Next to machinery came metals, while textiles ranked third. (See table
19)

Table 19. Export Commodities to Pakistan(in million of U. S. dollars)

1960 1961
59.0 51.7
3I.2 14.7

30. 9

18.7

35. 3

54.3

(7.5)

(18.7) (10.1)(25.8)(10.9)(22.3)(33. 0)(O. 8)(O.8)(4.2) (2.3)

(3.6)

(5.1)

(6. 6)(15. 1)(transportation)

(O.2)

(2,3)

(7.7)* (2.3)(1.5)(2. 8)

(6.5)

(6.3)

(precision)(O, 1)(O,3)(O.6) (O.5)

(O.6)

(O.8)

(O. 9)(L 2)

2L4(12.2)

1958

1959

22.0

25.1

1. Machinery

5.8

10, 9

(general)(4.6)(electric)

Total

2. Metals(iron and steel)

3. Textiles

1963

1964

1965

47.8

80. 5

I03.9

8.8

5.6

12.3 17.3

5.5

8.3

14. 9

(7. 6)(4.0)(9.6) (14.2)

(2.6)

(5.2)

(8.3)

3.5

4.0

6.9 6.1

7.2

6.8

IL3

IL5

(O.2)
(2.1) (1.7)(O. 9)(2. 1)

(1.9)

(2.4)

(3.2)

(1. 9)(3. 2)(2.3)(viscose short fibre)(artificial silk yarn)

!962
57.3

(1. 1)(1. 6)(Sources)

Same as Table 6.

(Note)' Ships of 4.0 million dollars are included.

THE DEVELOPMENT OF JAPANESE TRADE WITH 33
THE BRITISH COMMONWEALTH IN ASIA

Imports from Pakistan are chiefly raw materials, such as cotton and jute.

(See Table 20)

Table 20. Import Commodities from Pakistan(in million of U. S. dollars)

1958 1959 1960 1961 1962 1963 1964 1965

Total 34.2 32.4 31.7 28.9 28.5 47.7 31.1 26.5

Rawmaterials 34.1 32.1 30.8 27,9 27.6 46.0 28.1 24.0
(cotton) (25.3) (21.4) (17.2) (12.3) (16.0) (31.4) (15.7) (12.8)(jute) (7.1) (7.2) (10.0) (11.9) (8.8) (12.6) (9.6) (8.1)(Source) Same as Table 6.

6. Ceylon
Japanese trade with Ceylon showed an export surplus during this period.
The ratio of trade balance to export ranged from 55% in 1958 to 70% in 1965,

but the average ratio during the period was 66.2%. This figure places her
third in this area following India and Pakistan.

Table 21.

Japanese Trade with Ceylon(in million of U. S. dollars)

Export

(A)
en
26
32
33
32
22
23
22

Balance
Import(,) (,)=(.)- (B) {-Sl i- (%)

7 27
101678.86e.4
12 20 61.6
10 23 65.0
7 25 77.5
10 12 56.4
10 13 58.8
10 12 54.5
1958-65 226 77 149 66.2
1958

1959
l960
1961

1962
1963
1964
1965

(Source) Same as Table 6.

(Note) Same as Table 6.

About half the exports to Ceylon was occupied by textiles in 1965. Next
came metals and machinery, although their amounts were very small.

(See Table 22)

Table 22. Export to Ceylon(in million of U. S. dollars)

1958 1959 1960 1961 1962 1963 1964 1965

Total 34.6 26.0 32.2 33.0 32.4 22.0 23.3 22.0

1. Textiles 25.0 15.8 17.8 18.7 15.2 8,1 9.9 9•2(cotton fibres) (13.5) (7.8) (9.1) (13.0) (10.5) (5.5) (6.3) (5-O)

34 FUKUO KAWATA
2. Metals 1.1 O.8 2.2 2.3 3.6 3.2 2.4 2.4(iron and steel) (O.4) (O.3) (1.1) (1.4) (2.8) (2.7) (1.9) (1.9>

3. Machinery 1.1 2.4 3.2 2.3 2.8 3.0 3.2 2.3(general) (O.3) (O.6) (O,8) (O.3) (O.9) (1.9) (1.8) (!.1)(electric) (O.3) (O.4) (O.8) (O.8) (1.3) (O.4) (O.6) (O.7)(transportation) (O.2) (1.0) (1.3) (O.9) (O.6) (O.7) (O.7) (O.5)(precision) (O.3) (O.3) (O,2) (O.4) (O.2) (O.1) (O.1) (O.1)

4. Chemicals O.2 O.4 O.7 O.6 1.8 L5 1.9 L9(fertilizer) (O.4) (O.7) (1.0) (1.2)(Sources) Same as Table 6.

Imports from Ceylon mainly consist of raw materials, such as natural
rubber and coir, and foodstuff, such as black tea. Both categories take up
almost all the amount of import. (See Table 23)

Table 23. Import from Ceylon(in miltion of U. S. dollars)

1958 1959 1960 1961 1962 1963 1964 1965

Total 7.3 lo.3 12.4 10.2 7.3 9.6 9.6 10.1
Rawmaterials 5.2 8.1 10.0 6.7 4.5 5.8 6.0 5.6(natural rubber) (3. 7) (5. 7) (7. 2) (3. 2) (2. 5) (2. 5) (1. 8) (2. 4)(coir) (1.2) (1.3) (2.0) (2.2) (1.4) (2.7) (2.9) (2.1)

Food-stuff 2.0 2.2 2.4 3.0 2.5 3.5 3.3 4.3(black tea) (1. 4) (1, 6) (1. 9) (2. 5) (2. 2) (2. 9) (2. 8) (3.9)(Sources) Same as Tab le 6.

From the above statistical figures, we can classify the Asian British Com-

monwealth into two groups as to our export commodities. One is the lightindustrial goods market and the other is the heavy industrial goods market.
To the former belong Hong Kong, Singapore and Ceylon, where textiles areleading articles among exports, while to the later belong India, Pakistan and

Malaysia, where machinery, or metals hold a predomiant position among
exports.

As to the ratio of trade balance to export during this period, the largest

figure is registered by Hong Kong (87.5%), followed by Singapore (78.4%),
Ceylon (66.2%), Pakistan (41.5%) and India (15.4%). Malaysia recorded aratio of -496%, meaning an extremely large import surplus. The smaller
the ratio in absolute number, the better balanced is Japanese trade with thatcountry, showing that her trade with India is best balanced.

III
As to the geographical composition of Japanese trade with the Asian
British Commonwealth, we find that, as to market, Hong Kong ranks firstTHE DEVELOPMENT OF JAPANESE TRADE WITH
THE BRITISH COMMeNWEALTH IN ASIA
taking up more than one third of Japan's export to this area, followed by India

and Singapore, accounting for 25% and 15% respectively in 1965.
As to Japan's sources of supply, Malaysia plays the most important role,

occupying 52% of her import from this region in 1965. India ranks next to
Malaysia, showing 28% in 1965. The above two countries accounted for 80%
of Japan's import from this area ; similar conditions prevailed in 1958.

(See Table 24)
Table 24. Geographical Composition of Japanese Export to the

Asian British Commonwealth (%)

1958 1963 1965

1. HongKong 30 39 35
2. India 25 24 25
3. Singapore 23 18 15

4. Pakistan 7 8 13
5. Malaysia 4 8 9

6.Total
Ceylon10 3 3loo loo loo(MFgli2.iil,.M,giiiOn Of) (333) (63s) (si6)(Sources) Same as Table 6.

From the above table, we realize that between 1958 and 1965, Hong Kong,
Pakistan and Malaysia increased their shares in the exports from Japan, while
Singapore and Ceylon decreased theirs.
Table 25.

Geographical Composition of Japanese Import from the

Asian British Commonwealth

1958

1963 1965

Malaysia 53
54 52
India
25
25
28
Hong Kong 4
Singapore 4
Pakistan 11
Ceylon
3 loo
Total
loo
loo
(llFgl'2.`?i.M,gii`O" Of) (3oo) (so4) (so6)
L

2.
3.

4.

5.

6.

(Sorces) Same as Table 6.

From the above table, it is made clear that during the period in question,

India, Hong Kong and Singapore raised their shares in the imports into Japan,
while Pakistan and Ceylon lowered theirs.

When we compare the composition of British export to this region withss

FUKUOKAWATA

36

that of Japan, we find that the largest market for Britain is India, while Hong

Kong is the largest outlet for Japanese goods, India following Hong Kong.

(See Table 26)
Table 26. Geographical Composition of British Export toCommonwealth Countries in Ashia(%)

1958 1963

L
2.
3.

4.
5.
6.

India 50
40l\,:Lag,s:.
I2, l21
Hong Kong 10 16

Pakistan 9 12

CeylonTotal loo loo 8
loo 7

1965

sc
27
19
15
5

(l IFglik.i ll, .rn,g"'O" Of) gog gs3 gn(Ratio of export to the Asian Commonwealth countries to the totalexport of Britain) 10% 8% 7%(Sources) IMF. Direction of Trade.

From the above Table, we find that during the period in question theshares of India and Ceylon were decreasing, while those of Hong Kong andPakistan increased. Although India still remains the largest market for Britain,
it is a noticeable fact that its share has steadily been declining.

Table 27. Geographical Composition of British Import from

theAsian Commonwealth Countries (%)

1958 1963 1965

LIndia tto 43 41

2. HongKong 9 21 22
431 sMi:}a,YpSg:. 175 s9} 15

5. Ceylon 15 13 14
6. Pakistan 7 8 8Total loo loO 1oo(lllegyed.i".m,gllion Of) s4s gis ssg(Ratio of import from the Asian Commonwealth countries to the tota1

import of Britain) 8% 7% 5%(Sources) SameasTable26.

From the above table, it can be noted that as in the case of export theshare of India tends to decrease, while that of Hong Kong increases. It is a

noticeable fact that the relative importance of the Asian CommonwealthCountries as British export markets and as British sources of import isTHE DEVELOPMENT OF JAPANESE TRADE WITH 37
THE BRITISH COMMONWEALTH IN ASIA

decreasing, as is seen in the case of Japan.

It is a matter of common knowlege that the commonwelth countries areprotected from foreign competition by the Imperial Preference system.

It is needless to say that the British position in the commonwealth was
traditionally more important than that of Japan, but in recent years the Japanese position has been improving slightly.

Between 1958 and 1963, the Japanese share in the total export of thecommonwealth countries in Asia rose from 6% to 8%, while the British sharedeclined from 19% to 17%.
During this same period, the Japanese share in the total import of thisregion increased from 7% to 9%, while that of Britain decreased from 17% to15%. (See Tables 28 and 29)
Table 28. Position of Britain and Japan in the Export of the Asian

CommonwealthCountries (%)
Export to Japan
1958{ 1965{ 1958
Malaysia{ 1958Singapore{ 1958India{ 1958
Pakistan{ 1958
CeylonHong Kong

1965*

1965

1965

1963

1965

4
6
12
17
8
4
6
7
10
5
2
2

Export to Britain

11
14
15
7
10
6
28
19
20
13
34
26

T.t.1 Ilg19g. s6 11:(Source$) Same as Table 6, and Table 26.

(Note) * Estimated.

Table 29. Position of Britain and Japan in the Import of the Asian

CommonwealthCountries (%)
ImportfromJapan ImportfromBritain"ong Kongllg21g l? l2,

Maiaysia (l&e, ,g 3

FUKUOKAWATA

38

Singapore
India
Pakistan

Ceylon

l1958
1965
(1958
1965
I1958
1965
(1958
1%5

6

21

11

11

5

20

6

12

6

18

10

15

9

24

8

18

..,., llg65g, ; lg
(Sources) Same as Table 6 and Tabie 26.

(Note) * Estimated.
Now let us compare the British and Japanese elasticity value of export toand import from this area.

Between 1958 and 1965, the rate of increase of import of this area fromthe world was 51.6%, while the rate of increase of export of Japan to this area

was 144.8% and that of Britain 6.8%. The Japanese elasticity value of export
is 2.80, and that of Britain is O.13. The former is more than twenty times thelatter. This means that Japan is more than twenty times as sensitive as Britain
to the increase of import of this area.

In a similar way, both Japanese and British elasticity values of importfrom this area are calculated as 1.66 and O.12 respectively. The import elasticity value of Japan is more than ten times larger than that of Britain.
This implies, as in the case of the export elasticity value, Japan is far moreclosely related to this area's trade than Baitain.

Table 30. British and Japanese Elasticity value of expor and importfrom the British Commonwealth in Asia (1958-1965)
Rate of Increase of Import in the Asian Commonwealth (A)51.6%

Rate of Increase of Japanese Export tQ this area (B)

1".8%
6.8%

Rate of Increase of Brit;so Export to this area (C)Export Eiasticity vaiue of Japan EItllii-

Export Elasticity value of Britain [AClRate of Increase of Export in the Asian Commonwealto (D)Rate of Increase of Japanese Import from this area (E)Rate of Increase of British Import from this area (F)import Eiasticity vaiue of Japan [lii]Import Elasticity value of Britain [g](Sources)

Same as Table 26, and IMF. International Financial Statistics.

2. 80

O.13

41.4%
68.7%
4. 9%
1.66

O.12

THE DEVELOPMENT OF JAPANESE TRADE WITH 39
THE BRITISH COMMONWEALTH IN ASIA
IV
Japanese export expansion to this area is chiefly due to the growth ofmachinery export. Keeping pace with the progress of industrialization in thisarea, the demand for machinery will certainly increase. In order to increase
further the export of machinery, Japan must win in international competition
with other leading industrial nations. Japan enjoys an advantage in the exportof light machines, such as cameras, transistor-radios, tape-recorders, electricfans and so on, but is not so strong in the export of machine tools, heavy ele-

ctric machines, construction machines, rolling machines and so on. (SeeTable 31). It is, therfore, necessary for Japan to increase her competitive
power in the field of heavy machines.

Table 31. Share of Japan, Britain and other Industrial Nations in the Importof Machinery into the British Cornmonwealth in Asia (%)
Share of Japan

Share of Britain

Share of other industrial

W. Germany
22.1

India: (1963/64)

natlons

Machine tools

2.3

23. 6

Heavy Electric Machines

3.8

23. 7

Rolling Machines

2.1

Agricultural Machines
ConstructioB and Loading

6.8

24.8

3.8

24.5

85.0

1.5

Machines

U.S.A.

26.0
W. Germany
30.6
W. Germany
15.1

U.SA

30.6

Hong Kong (1963)
Transistor Radio

Netherlands

Radio and Parts

83.4

Camera76.9

Tape-Recorder

71.6

U.SA

9.2

11.0

2,6
W. Germany
16.3

W. Germany' 9.4

China (Mailand)
12.0Electric Fan

63.1

Passenger Car (1600 cc.)

8.5

49.8

Italy

17.7

Truck (more than 3 tons)

LO

97.5

U.S.A.

LO

Malaysia (1963)(Former Federation of Malaya)

Italy

Motor-Cycle

49.5

Passenger Car

6.6

Machine Tools

2.3(Source)- 38,2
W. Germany

52.8
18.9
W. Germany

30.4 7.3

Japan External Trade Organization.
"KaigaiShijoHakusho". (1965)(White Paper on the Oversea$ Markets).

41

ON THEKIHANSEN (JAPANESEWOODEN
COASTWISE VESSELS)
Seiji SAsAKI

Coastwise shipping is stillplaying an important part in Japanese internalcargo-transportation ; it is wellÅë
ratios of all transport methods

proved in the recent transition of a!lotment-

motor-car

1953
1957
1960
1963
1964

railway

coastwise shipping

total

11%

54%

35%

100%

13
15
23
26

47
40
33
32

40
45
44
42

100

100
100
100

the Japanese coastwise fleet was composed of
middleDuring theof 1965,
consistingof with 1,734,109 gross tons, 14,776
vesselsiron cargo-boats 3,040

wooden cargo-boats with 857,515 gross tons, 1,793 iron tank ships with 594,882

gross tons and 618 wooden tankers@
with 37,846 gross tons.

Of course, coastwise iron cargo-boats and iron tank ships are the mostimportant. However, it is certain that wooden vessels, either general cargoboats or tank ships, still play a fairly substantial role. These wooden vessels

are, on the whole, popularly called the"Kihansen". This is the subjectfor
study in this article.

I
As stated previously, Japanese coastwise vessels are most popularly classi-

fied into three kinds, ordinary-sized iron ships, small-sized iron ships andwooden ships, except for the distinction between general cargo ships and tankships. It has also been mentioned already that wooden coastwise vessels arecalled " Kihansen " in the most common sense. But the concept of Kihansen
is itself fairly complicated and puzzling as the whole construction of Japanese@ cif. White Book of Japanese Shipping 1966, P. 128.
@ Except for ships used for both coastwise service and foreign service, iron cargo-boats andiron tankers for pure internal traMc were 1,457,871 gross tons and 571,832 gross tons
respectively. The classification of coastwise vessels at the end of 1965 shows little change
as follows: iron cargo-boats 1,359,OOO gross tons, vv'ooden cargo-boats 856,OOO gross tons,

iron tankers 574,OOO gross tons and wooden tankers 38,Ooo gross tons.

SEIJI SASAKI

ag

coastwise sea-transportation is not so simple. Moreover, their actual conditionis quite unknown because there has been no investigation made yet. Withouta clear comprehension of their situation, role, and contribution we can notpredict the present and future of Japanese coastwise shipping. In order to under-

stand the whole problem of Japanese coastwise transportation we must exert
efforts to study the Kihansen further. This is the purpose of the present article
and has been the main objective of our investigation through the past two years.

"Ki-han-sen", the three Japanese words or Chinese characters, bring tomind a sailing-vessel, because " han " stands for "sail". Students who are notacquainted with shipping and transportation often ask the question as towhether the Kihansen is a wooden sailing-vessel. It is true that most Japanesepeople do not regard them as steamers or ships sailing under their own power.

The Kihansen in these days, however, does not have sails. Though we canoccasionally see the smaller Kihansen sailing before the wind, this is a rarity.
At present, all of these ships do not use sails. The sail is only used to assistin speeding up or in saving fuel. The ship navigates under her own engine,even if it is a very simple old type one-the so-called "Yakitama-engine"-,so the Japanese Kihansen is firstly and fundamentally defined a small wooden
steamer.

Though the Kihansen is apt to be understood as meaning a sailing vessel
or a compromise between a sailing vessel and a steamer not only ideographically but from the point of its historical origin of development, its present statusis only that of a wooden steamer, and that alone. Even the actual historicalorigin of the Kihansen was evidently after the age of steamers, not before.
They also did not appear during the transit process from sailing-vessels to
steamers. As Japanese coastwise trade and geographic conditions have uniquecharacteristics, people began to seek a special suitable coastwise vessel in placeof both the too large iron steamers and the declining sailing-vessels, and began

to exploit the Kihansen. In so far this wooden steamer was a substitute not
only for sailing-vessels but for iron steamers.

While the Kihansen can in its first meaning be grasped as a coastwise
wooden steamer as aforesaid, there is a delicate shade of meaning between the

Kihansen and a wooden steamer or a wooden ship. The wooden ship orwooden steamer is clearly of a larger concept than the Kihansen which ismainly used to transportcargo. Passenger-boats made of wood are excluded
just as are special wooden cargo-ships, for example, fishing-boats, barges andjolly-boats, are not called by this term. In this sense we must be cautious ofJapanese governmental statistics, where only wooden ships are shown inON THE KIHANSEN
general. The wooden tanker is clearly included in the concept of the Kihansen
in our shipping circles, though many people are likely to put it beyond the kenof the kihansen.

On the other hand, ocean-going wooden cargo-steamers are not includedin the popular concept of the Kihansen. The latter is only engaged in coastwise traffic along the coasts of our island empire. These are the main charact-eristics and the rough outline of the Kihansen, the special coastwise woodencargo-steamer of Japan.

II
The Kihansen has of course its own raison d'etr6, history and economic
effect, while it is apt to be regarded as a very old-styled small ship with limited

function or activity field. It is diMcu}t to conclude imprudently that the
Kihansen must soon give place to the iron-steamer-especially, the so-called
small-sized iron ship-, which replaced sailing-vessels or wooden ships about acentury ago. Efforts for obtaining a more ethcient ship must be made by theowners of the Kihansen themselves and they must seek the advice of thegovernment, shipbuilders, and specialists in this field. It may consequent!ylead to a new revolutionary ship taking the place of the Kihansen. However,the Kihansen is today engaged in actual cargo trathc and is making a really

important contribution to Japanese industries. Many shipowners and crew
members make their living by ownership and operation of the Kihansen.
Without a clear understanding of the actual conditions and services of the
Kihansen we can not predict its future nor suggest substitutes.

The tonnage of the Kihansen (wooden ship) and their transport volume(ton-kilometer) are not small and have not declined during the past several

years, even if percentages for the whole are gradually dropping. In Octoberof 1965 the gross-tonnage of the Kihansen of 885,OOO-tons, accounted for 30%
of all coastwise ships (2,950,OOO gross tons), and the transport volume amounted

to 96 hundred million gross tons (12% for the whole). Other governmental
statistics show the tonnage of the Kihansen as follows :vessels gross tonnage (1,OOO gross tons)

1961 (July) 26,118 1,114
1962( t, ) 26,251 1,126
1963( tt ) 26,325 1,134

1964( t, ) 15,394 896

The great difference between 1964 and the three years prior seems to be
due to change in statistical methods, for such a large-scaled decline of over ten

43

"

SEIJI SASAKI

thousand vessels can not occur suddenly within only a year. Although we do
not yet have truly reliable statistics for the Kihansen, the whole gross tonnage

will amount to about 850,OOO to 1,150,OOO.

III
The majority of Kihansen shipowners are so small in scale that they own

only a single vessel. A minority own a few wooden vessels including verysmall-sized iron-vessels. In 1965 these petty shipowners organized the "Zen-koku-kaiunkumiai-rengokai" (National Association of Coast-wise Shipping
Guild) together with the operating agents and treating agents of the Kihansen.

The last is very curious group controlling the Kihansen as cargo-brokers or
charterers. (They are not only the owners of the Kihansen but the operators
as well). On the other hand some large or middle-scaled coastwise shipping
companies which own or operate a few Kihansen take part in the association
under certain conditions while the more substantial stiff-necked Kihansen shipowners have not yet joined this national association, even though they do form
some local associations. So the national association is not a simple and perfectorganization, but the government has reason to be proud of it because it has
succeeded in organizing over 90% of the Kihansen interests.
As of April 1965, the association had control of about 590,OOO gross tonsof the Kihansen (see the following table). From the above-mentioned whole
tonnage of Kihansen for the same period of 896,OOO gross tons, the percentage
assoclatlon

data

our lnvestlgatlon
Cargo boat

vessels

Hokkaido

gross
tons

[
vessels

gross
tons

district

26

4,627

21

3,673

district

76

7,246

78

7,162

TohokuHokuriku

Tankervessels

Total

gross
tons

vessels

gross
tons

I
i

21

3, 67378

7, 162

-i

32

1,830

514 I

243

17,718255

16,682-[ldistrict

31

1,714

32

Kanto dstrict

796

56,937235

Tokai district

263

17,522

255

16,682

Kinki district

429

39, 508322

21,028

7

375

329

21,403

district
Shikoku
district

2,254

159,826

1,653

122,89834

2,34tl

1,687

125,242

1,734

145, 935

1,312

94,659

29

1,510

1,341

96,167

district

2,070

154,742

1,736

156,381

3

230

1,739

156,611,Total7,889

588,057

5, 644439, 246

81 L

4,963

5,725 444,209

Chugoku

Kyushu1, 830t

117,2048

ON THEKIHANSEN
would be 66. We have succeeded in investigating 444,OOO gross tons of ships
belonging to this association. Taking into account the lapse of three months,

our investigation covers about three quarters of the association's controlled
tonnage, and comes to about half of the whole registered tonnage.

From this investigated tonnage and shipowners (agents) we were able tQ
grasp some characteristics quite easily, especially regarding the local inclination, the average size of vessels and local differences, the limited ownership andconnection with ownership of small-sized iron steamers, etc. Only the inclination and the average size will be taken up in this article.

IV
There are only a few Kihansen and owners in the northern or easternparts of Japan. Among the components of the Zenkoku-kaiunkumiai-rengokai
25 wooden vessels (about 4,500 gross tons) belong to Hokkaido, 75 vessels(about 7,OOO gross tons) belong to the Tohoku district and 31 vessels (1,714
gross tons) to the Hokuriku district. We can also find nearly the same numberof shipowners (partners) in each district. There are about twenty thousand
gross tonnage of Kihansen in each of the three districts of Keihin, Tokai, andMihe. However, the greatest number of Kihansen are concentrated in westernpart of Japan consisting of Kyushu, Chugoku, and Shikoku as the following
table indicates. This strengthens the general opinion that the western half ofJapan is an enclosure for the Kihansen and the Setonaikai is their mainnavigation route.

association data our investigation
gross tons percentage gross tons percentage

Kyushu 154,742 26 156,611 36
Chugoku 159,826 27 125,242 28
Shikoku 145,935 25 93,887 21

Others 127,554 22 68,468 15
Total 588,057 100 444,208 100

According to this statistics of the association 78% are concentrated inwestern part of Japan. According to the author's investigation, in which mostwestem Kihansen and their members are omitted, because no answers were
forthcoming to our inquiries, the concentration ratio comes to 85%. As it was
impossible to get suflicient data, especially in Chugoku, Shikoku, as well as
in the Hanshin district, all percentages in these three western districts are notreliable. It is better to understand that each district occupies nearly the sameratio,-a quarter each as given in the association data.

ca

SEIJI SASAKI46

The clear concentration toward the western part of Japan is in itselfamost noteworthy characteristic, and furthermore has direct connection with thenext problem of local differences in the average size of the Kihansen.

v
A recent development in the construction of these ships can be found intheir tendency to unite quality with quantity. 9ualitative improvement andchange take place along with quantitative expansion. Whenever any reasonable or revolutionary development is done in the scape of the ship-structure, itis accompanied by a substantial magnification in the size of the ship. At least,in this effort to exploit a new kind of ocean-going ship we can expect simult-aneously an enlargement in the size of the ship. As it is the ambition ofalmost all shipowners to own a 1arge superior ship, this is only natural anda popular tendency in the developmental history of ships.

But our Kihansen shows a strange tendency. Rather than becoming 1arger
their average size has recently had the tendency of becoming smaller. Mr.
Sadaji Ito, the ex-president of the Kinkai Yusen Co., Ltd. and now the chairmanof the underwriting company for wooden vessels, emphasizes roughly a noteworthy tendency in his recent article in a pamphlet titled "Wooden Vessels
Observed from the View-point of Insurance" as follows ; "After World War II
the size of the Kihansen has been gradually concentrating toward a middle-size,
between 50 gross-tons and 100 gross-tons, by enlarging small vessels on the one
hand while decreasing the size of large vessels on the other hand. ...............""............,........................................................ The average size ofwooden vessels insured shows such an evident decline during the fifteen years
from 1951 to 1965 as indicated in the following table.

1951 1955 1960 1965

111 gross tons 102 gross tons 98 gross tons 92 gross tons
While the owners of the smaller Kihansen have attempted to enlarge their,ship-size, the owners of the larger Kihansen aim conversely at building smaller
vessels ".

He also describes the fact that ordinary owners of wooden vessels cannot
build small-sized iron ships because of their lack of funds, and that they are very

anxious about the operation and reimbursement from small-sized iron ships.

The number of large-sized Kihansen over 200 gross tons are clearly showing a decrease even in oMcial statistics, though Mr. Ito does not point out theconcrete sizes of the large-sized Kihansen.

ON THEKIHANSEN

47

1951 1956 1961 1964

327 vessels 209 vessels 184 vessels 155 vessels
On the other hand, wooden vessels from 20 to 100 gross tons have been
increasing very rapidly throughout this same period. Both tendencies may betaken as an illustration of the concentration toward middle-sized Kihansen to acertain extent, even though there is also a distinct increase of wooden vessels@

from 100 to 200 gross tons.

The result of our investigation also proves the same overwhelming superiority of middle-sized or smaller-sized Kihansen and furthermore shows the local

differences in average sizes. For each group of the Zenkoku-KaiunkumiaiRengokai the average size is calculated as shown in the next table.

Hokkaido district

branch
{Hokkaido
Hakodate branch

Aomori branch

Tohoku district{Iwate branch

Hokuriku district-Nigata branch

Kanto district

Kanto-coastwise branch{Yokohama branch
Shizuoka branch

Tokai district

Hanshin district

Chugoku district

Shikoku district

Kyushu district

Mikawa branch
Chubu branch
Mihe branch-Osaka branch
Okayama group
Hiroshima group
Yamaguchi group
Shimane group

200 gross tons

124 tt
62 tt
102 tr

57"

64 tt
74 tt
95 t,
45 ti

133 "
63 ii
84 it

61
80
74 tt
80
80 ,

group
{EhimeKagawa group

82

Fukuoka group
Saga group
Nagasaki group

101

72 i,

56 '
74
78

Kumamoto group

77 90 t,Kagoshima group
Miyanaki group

32
121
109

Oita group@ These middle-sized Kihansen show a changeable development as follows,
1951, 930 in 1956, 1,552 in 1961 and 1,823 in 1964.

1,oo7 vessels in

48

SEIJI

SASAKIOn one side we can find only two groups, having a gross tonnage below 50,

the Mikawa with 45 gross tons and the Kagoshima with 32 gross tons, On theother hand there are four local branches, Hokkaido, Hakodate, Tohoku andChubu, and three prefectures, Fukuoka, Miyazaki, andOita having a gross tonnageof over 100. The majority are concentrated within the limits of 50.NtlOO grosstons. Though there are three prefectures with over 100 gross tons, the average

size of the all Kyushu district comes to 90 gross tons. The fact that Kyushu,
Shikoku (with total average of 74 gross tons) and Chugoku (with total averageof 72 gross tons) constitute the central part of the Kihansen group, it makes
78 gross tons as their national total average size. It is very important andsignificant that the national total average and each average of three main
districts which is investigated by Qur hands are less than 90 gross tons and morethan 70 gross tons. It is in fact curious in comparison with a distinct magnifying tendency of ocean-going vessels.

We must also give attention to the local difference of the Kihansen
average-size. Hokkaido shows the 1argest average size of 200 gross tons, while

only a few vessels are owened and operated in this district. This is the same
condition with the case of coasting iron-ships. Compared with this fact, thewestern part of Japan which is the main sphere of influence of the Kihansenshows generally a smaller figure of average size. And that we can find out adistinct difference among each local branch. For example the average size of
Ehime Kihansen is 82 gross tons and that of Kagawa Kihansen is 56 gross tons
inside of the Shikoku district. In the Kyushu district the smallest average size

(32 gross tons) of Kagoshima prefecture has a difference of about ninety grosstons from the largest 12! gross tons of Miyazaki prefecture. All prefectures
belonging to the Chugoku district show almost similar average sizes ; at least,
those of the three prefectures are the same. It is clear that such local differ-ences in the Kihansen average size must be closely connected with many innerand economical conditions, though we have no chance to take up the phasein this article. Here we will only call public attention to the fact.

49

HISTORYAPPROACHES TO COMPANY
Tadakatsu INouE

I
In an essay titled Approaches to the History of Individual Business Units(Kobe Economic and Business Review, 1966), the writer examined the various
points of view in the discipline of business or entrepreneurial history fromwhich the history of a business unit-a business man, a firm, or a companywould be written : a group of historians who follow Professors N. S. B. Grasand H. M. Larson, and their associates in Harvard Business School would
proceed from the standpoint of administration; a group of the Marxians in
Eastern Germany who have been increasingly interested in research and writing on the histories of individual units would consider the events from thestandpoint of clags strife;a group of economists who respond to Professor
Schumpeter's theory of "neue Kombination" or "innovation" would emphasize the relationship of creative entrepreneur to economic development; and agroup of scholars led by Professor A. H. Cole would be interested in theeconomic and social significance of the events occurred in an entrepreneurial
world. In this paper, however, the writer will arbitrarily hold one of thesestandpoints, that is, the administrative point of view which was originally
illuminated by Professors Gras and Larson, and examine another problem
concerning the nature of the history of individual business units.

As everyone can find, the history of a business unit holds a preeminent
position in research in business history. Most of the books in Harvard Studies
in Business History, the first series of monographs in business history issued

under the auspices of the Harvard Business School since 1931, and in Verb'ffentlichungen der IJVirtschaftsgeschichtlichen Forschungsstelle e. V., a series ofpublications in business history founded in 1949 in Hamburg by the Center'spresident Dr. Ernst Hieke, are either biographies of business men or the histories of companies. Most of the articles which fi11 up the periodicals in businesshistory, that is, Business History Review in U.S.A., Business History in Eng-land, Tradition: Zeitschrtftfar Firmengeschichte und Unternehmerbiographie

in Germany, Histoire des Entreprises in France, and Business Archives andHistoror in Australia are the histories of individul business men and firms.
This is also the same as to the Japanese periodical issued recently under theTADAKATSU INOUE

50

title of Keieishi-gaku (Japan Business History Review).

It must be noted, however, that, while the history of individual business
units occupies a high position in the study of business history, it is not the only

subject, area, or type of study that call for research in the field of businesshistory. It is only prejudiced opinion to identify business history with businessbiography and company history. There are, to be sure, other approaches to thehistory of business. According to Professors Gras and Larson, there are thehistory of functional divisions of business, the history-not the economic but
the business history-of an industry or a trade which should ideally present a
generalized picture of the administration and operation of the business units

which have made up the industry or the trade, and, of course, the general
history of business which would include the story of individual men and companies, industries, and special topics. Then, what position does the history ofindividual units hold in the whole system of business history ?

IIFirst of all, the history of individual business units is th6 primary step outof which all other business histories must be constructed ; the history of industries, of aspects of business, and of business systems or periods in the history ofbusiness can be written only from an understanding of how men and firms
have worked and developed. It is impossible to write the business history of
an industry, such as cotton textiles or meat-packing, until the histories ofsignificant units within a given industry have been written. Similarly thestudies of topics or segments of the history of business, such as cost accounting

or labor management can be approached through individual business histories
or through research in the pertinent records of individual companies. And, ofcourse, the great task of tracing the general historical development of businesscan be forthcoming only after we have had an adequate number of special
studies of business men and firms. The history of the unit is, therefore, anecessary contribution toward a larger synthesis. It must be recalled here thata considerable group of men and women who worked with the late Professor
Gras in the early days of business history were patient enough to concentrateheavily on research in the records of men and firms.
The second implication of the writing of the history of individual men andfirms is the creation of the cases through which the larger whole in the historyof business would be observed. The reason for this is simply the fact thatevery particular story will illustrate the general. For example, the story of the

Massachusetts Bank, the first commercial bank in Boston, will be more or less

APPROACHES TO COMPANY HISTORY
illustrative of early American banking problems and bank management ingeneral ; the narrative of Cornelius Vanderbilt who died worth over $100,OOO,

OOO in 1877 will have some reference to a general pattern of behabior of theAmerican business men of that period ; and the history of the General Motors

Corporation under Alfred P. Sloan will present some aspects of changes
occurred in the internal organization of American giants corporations. It may
be said, therefore, that every particular case on various periods, on various

countries, and on many aspects of the work of business may be used as a toolfor getting a general view on the historical development of business, especiallywhen we have not yet built a general body of business history.
It must be kept in mind, however, that in the study of a single firm there
is relatively little likelihood that broad generalization will be made because thescope of material is necessarily restricted. In each instance, therefore, weshould realize the limit of the discoveries and, then, learn which part or aspect

the particular firm being studied will present in the larger whole. Someone

may say, however, that he has not yet learned what the larger whole is andtherefore that he is in no position to consider how the firm fits into the general.

Perphaps, however, such contradiction will be gradually overcome as the literature on the histories of men and firms is being created and a general body ofbusiness history is being developed.

III
As we have seen, the study of individual business men and firms is ofunequal value as a necessary preliminary to the development of large historicalstudies of aspects of business, of industries, and of nations. It is also of nearly

equal value as an instrument to be used in observing the larger whole in thehistory of business especially where no general body of business history is
prepared. But if the implications of the writing of histories of men and firms
are confined to these points, the histories of this type will be materials or tools

for others and not things to be memorized for their own sake. To be sure,there are some historians who doubt of the possibility of the history of individual business units as an independent field of historical research and study ; they

wonder if the history of individual firms or companies can be the subject of thescholarly study because the potential readers will be limitted largely to a small
group of persons who are closely related to the unit.

It is true that there is a large number of histories of individual business

units that should subrnit to such criticism. The most representative type ofthem is the ordinary company history written to answer the need of the com-

51

52

TADAKATSU INOUE

pany for the celebration of a 50th, 75th, or 100th anniversary. It is often
written from the inside and on behalf of the company; and, when it is unfair

to reality, it must be regarded as propaganda. And, even if it exhibits no
propaganda, it is often a miscellaneous array of facts which are not woven intoa synthesis. In other words, it has no clear subject on which its research andpresentation should be focused. Thus, this miscellaneous type would not be
available to a wide array of readers, though it may satisfy the insiders or
antiquarians who are full of old memories on the company concerned.

It should be remembered, however, that what we are considering in thispaper is not the ordinary company history as mentioned above, but the businesshistory of the unit written from the standpoint of administration. And if thestory of the unit is presented as the history of such type, it will be not only
indispensable in the writing of more synthetic history of business but also of

unique value as a body of historical information to be memorized for its own

sake. Then, on what grounds can we say so?
First, the business history of individual business units of which we speak

has a central theme to which to focus its research and presentation; it concentrates on the history of business administration, that is, of policy, control,and management. It is right here that the history of this type is in contrast to

the ordinary company history that provides only a miscellaneous array of facts
which are not moven into a synthesis.
Second, the administrative history of individual firms is interested in thearea of choices of alternatives in organizing and coordinating various factors ingiven situations to accomplish an end. Obviously, such treatment comes fromthe recognition of the fact that, while business units must operate within theconditions in which they exist, there are still many alternatives of choices madeby the units. This approach must be compared with the economic determinismthat leaves no important place for free choice or decision.

Third, the history of the administration of business units thinks of things

as being done or in a process of administration. As mentioned above, every
unit has freedom of the will to guide its action. To the unit, however, know-

ledge cannot be made ready or complete in time for action. Thus the unit
have to proceed on a-trial-and-error basis. Differing from the economic history

that think of things as done, this approach puts emphasis on the process oftrials of individuals in meeting the needs and opportunities created by a chaing-ing environment. And in presenting the fiow of such efforts, the history of abusiness unit has a prominent place because it comes nearest to recording theexact nature of the administration of the unit.

HISTORY
TO COMPANYAPPROACHES
Now, it will be clear that the administrative history of a business units,
regardless of its name or fame, provides a body of historical information which
is useful to a wide array of persons including, of course, business men and theircandidates who are in need of developing the larger perspective and insight in
the administration of business.

53

55

CUMULATED COST RATIOS FOR
THE ECAFE COUNTRIES,.,' NosE
NobukoI Preface
Twice before the author has published analyses of cumulated cost ratios

for the Japanesei economy. The presentstudy starts from the same point as•1>
the previous analyses
and attempts to investigate the cumulated cost ratios
for other ECAFE countries, i.e. Australia, India and Malaya to link it up withthe previous studies. As before, we intend to observe the structure of final cost

factors in these countries from two aspects: cost cumulation and destination

cumulation. The models and symbols which we use in this paper are thesame as before. The results of cumulation from these two aspects are shown2)1 to 6. Based on these tables and data about Japan and the U.K.
in Tables
which we have estimated in previous works, we intend to present the economic
features of the above three countries.

II ModelforComputing
Cumulated cost analysts attempt to estimate the cumulated cost ratios by
two aspects of cumulation : One aspect is to estimate the ultimate distributionof final factor costs payment, i. e. imports, wages and gross profits, indirect tax

and subsidies by industry group and the other is to estimate the ultimate
distribution of these final factor costs payment by industry group to produce
final output destined to final destination categories, i. e. consumption, invest-

ment, government expenditure and exports.
Final costs factors consist of three categories of costs : costs of primaryfactors of production, imports for intermediate products from the rest of theworld and costs which are institutionally added. Wages and salaries andprofits are costs of primary factors of production, while subsidies and indirect

tax are included in institutional costs. All kinds of these final costs in an
economy are paid either directly or intermediately by the industry group.

According to the stages where costs are paid by the industry group, cumu* The author has profited very much from Dr. G. Stuvel's kind guidance and suggestions.
Also the author wishes to acknowledge particularly Mr. S. Tamino's help in cornputing theNoBuKo Nosa

selated cost analysts define the final factor costs as direct cost (or non-cumulatedcost), intermediate cost andtota1'

cost (or cumulated cost). Direct cost is thetotal of final factor costs paid directly by each industry concerned. For example,

wages which are received by laborers' households from an industry, say j who
employs the laborers, are direct labour cost. Intermediate cost is the final
factor cost which is paid by other industries, say r, who deliver the intermediate

products to industry j. For example, imports which are paid directly by r to
make an intermediate product destined for j as j's input, is called j's intermedi-

ate imports. The total of intermediate cost and direct cost is total cost. And
direct cost ratios, intermediate cost ratios and total cost r4tios are defined asratios of direct cost to total sale, ratio of intermediate cost to total sale, ratiosof total cost to total sale respectively.

We use the assumption of a certain fixed relationship in inter-industry
delivery of goods and services. As we have presented in previous papers, theanalytical model for estimation of cumulated cost ratios is as follows :For cost cumulation by industry group,

Q=-R(I-P)
or R-Q(I-P)-',
where P==(pi,•), Q== (qkj), R=(rki), Iis aunit matrix, p= Xi" , qki=21'
Yki , rki= Zki respectively. And in this case, xii,ptkj, zkf, 2i arejth industry's
interrnediate cost, direct cost, total cost and total sale respectively, thus pii,
qkf and rki• are intermediate cost ratios, direct cost ratios and total cost ratios
respectively.

And as for cost cumulation by destination categories,

S-RMI
or S=-Q (I-P) --' W,
where s=(sjh), w= (wik), and in this case sjk is the cumu!ated cost ratios of
final factor cost j for making goods and services destined for final destination category k and wik is the ratio of VVik to Tk and I7Vik is the amount paid fornn to Z Wth, and sii = 2] rji YVik,
goods and services by k to industry i and Tk is equal
rji is the cumulated J' ratio by industry i.

i=-1 l=1

Inter-industry transaction tables provide an empirical basis for an estima-tion of a cumulated cost analysis. Using the above equations and inputoutput tables in the three countries, we estimate the direct cost ratios, inter-mediate cost ratios and total cost ratios by industry group and by finaldestination categories.

57
CUMULATED COST RATIOS FOR THE ECAFE COUNTRIESIII Result
Table 1.1 presents summary of the results of the cost cumulation in thesethree countries. It indicates that in Australia, India and Malaya direct rates ofturn-over value are 60%, 62.9%, 78.1% respectively and the average inter-mediate costs ratios are 40%, 37.4%, 21.9% respectively. It is apparent fromthe table that the Australian direct rate of turn-over value is relatively small

while the average intermediate cost ratio is relatively high, and that the rateof tum-over value in Malaya is relatively high while the average intermediate
cost ratio is little. Comparing Table 1.1 with Tabe 1.2 the rates of turn-overvalue of these countries are relatively high and the average intermediate cost
ratios are, on the contrary, low.

Tables 2, 3 and 4 present the ultimate distribution of final factor costsin the above three countries. From these tables, we can observe the characteristic features of these countries' cost structures as fol!ows :i Cumulatedwageratios.
In Malaya in the service, rubber planting and transportation industries,
the direct wage ratios are considerably high while in the dwelling (housing),
metal, and tobacco industries, the direct wage ratios are low. In Australia, inthe finance and wood products industries the direct wage ratios are high while
the mineral oil, dwelling, business services industries are in the low direct wage

ratios group. Generally speaking, Malaya's direct wage ratios are lower thanthose of Australia, as in the former the average Per Capita is 183 while in thelatter it is 266.

Tables 1.1 and 1.2 indicate that even in Malaya the average direct wage
ratio is higher than that in Japanese industry of 161.1 and that in Australia theaverage ratio is less than the average direct wage ratio of the U.K. industryof 314.8.

The intermediate wage ratio of Malaya by her industry group are generally low, as Table 3 shows its maximum is the construction industry ratio which
is 38.6, while the average intermediate wage ratio is 5.3. This tendency is theresult of the low degree of inter-industrial relationship in Malaya, that is, herindustries do not buy much from other home industries but from foreigncountries and of her relatively low wage ratios. On the contrary, in Australia,

there are industries whose intermediate wage ratios are relatively high. Construction, metal industries, non-metal industries in Australia are typical cases.

Table 1.1 presents the average intermediate wage ratio in Malaya which ismuch less than the ratio in Australia which are slightly higher than those ofJapan of 177 and the U.K. of 196.

NOBUKO NOSEss

As for total wage ratios, Australian ratios are higher than Malayan ratios,
especially, in the construction, trade, metal industry groups where the ratios

are high. These high total wage ratios by the Australian industry group are
the result of the relatively high degree of inter-industrial relationship and of

the high wage rate. But Table 2 indicates that even in Australia, there aresome low total wage ratio groups, especially in mineral oil, dairying and thetobacco industry groups. Table3indicates also that even in Malaya, there isan exception ; i.e. the rubber planting industry's total wage ratio is high because

its intermediate wage ratio is considerably high.

Table 1.1 and 1.2 indicate that the average total wage ratio in Malaya of
237 is the lowest and less than the ratio in Japan which is 338, and that the
average ratio in Australia is 464, higher than the ratio in Japan but lower thanthat in the U.K. which is 511,5.

ii Cumulatedprofitratio
Table 3 indicates that in Malaya the dwelling, fishing, agriculture andrubber planting industries are high direct profit ratio groups while the metal,
and paper industries are the low direct profit ratio groups. On the other hand,
Table 2 shows that in Australia the dairying, dwelling and agriculture industries, direct profit ratios are high while in the dayry products, construction, andtobacco industries the ratios are low. Generally speaking, direct profit ratios

in Malaya are higher than the ratios in Australia as the former's average is
276 and while that of the latter is 249.

Both average ratios are higher than average ratios of Japan of 161 andof the U.K. of 175, as Tables 1.1 and 1.2 present.

The intermediate profit ratios in Malaya are much lower than those inAustralia. For example, the average intermediate profit ratios of the Malayan
industry and of the Australian industry groups are 94 and 158 respectively.
Consequently, the total profit ratios of Australia are greater than those of

Malaya. Tables 2 and 3 present maximum ratios in Australia, i. e. the construction industry's total profit ratio of 944 is higher than that of Malaya
whose dwelling industry's ratio is 930 while the former's average total ratio of

408 is also higher than the latter's average total profit ratio of 370. Theseaverage total profit ratio is higher than the ratio in the U.K. of 283 which islower than the ratios in Japan of 413, because that the average intermediate
profit ratio of 251 is relatively high while the ratios in the U.K. of 108 are low

respectively as Table 1.2 shows. From Table 4, we can analyse neither profit
ratios nor wage ratios of the Indian industry group.

iii Valueaddedratios

59
CUMULATED COST RATIOS FOR THE ECAFE COUNTRIES

Table4 shows that the ratios of value added are not divided in detail.
This is caused by the fact that primary costs of production arenot decomposedin the Indian input-output tables. In order to make a comparison of Indianvalue added ratios in Malaya with those of other economies, we must analyse
the ratios with value added ratios or primary costs of production ratio in

Malaya and in Japan. As Table 1.1 shows, Malayan average direct primarycosts of production ratio is 460 and exceeds slightly the Indian average value

added ratio of 458. These ratios exceed the Japanese ratio of 384. In therubber plant, service and dwelling industries in Malaya the ratios are high.
The maximum ratio in the rubber plant industry is 976, and the minimum ratiois that metal industry of 176. In India, the forestry, iron ore and agricultureindustries' ratios are high. The forestry ratio which is the highest of all Indianindustries is 923, and the rubber industry whose direct primary cost of produc-tion is minimum is zero. As for the intermediate value added ratios in thesetwo countries, the Malayan maximum is that of the construction industry of
105.4 while the Indian maximum is the construction urban industry of 202.3
and the minimum ratios are those of the rubber, crude oil, and forestry industr-

ies of zero respectively. The average intermediate value added ratio in Malaya

of 148 is lower than that of India of 243. These average intermediate ratios
in the two countries are much lower than the ratio of 500 in Japan.

Table 3 shows that the total value added ratios are high in the construction, trade, and rubber processing industries and that the ratios are low in thepaper and clothing industries in Malaya. Table4indicates that the ratios in
the construction, food grain, and railways industries are high while low in therubber, crude oil petroleum products, and electricity industries in India. As
Table 1 shows, the average value added ratio in Malaya of 607.7 is smaller thanthat in India of 701 and in Japan of 885.5.

iv Importratios
Import ratios, especially the direct import ratios indicate the measure ofdependency of an economy on foreign economies. In an industry group whose
ratio is high, the value added ratio is usually low and vice versa. For example,

as Table 2 shows, in Australia the mineral oil industry's direct import ratioof 521 is the highest in the economy while the service, grains, gas and waterindustries ratios are low. The products of the latter industries are independ-ent of import and their wage ratios are higher than the former. In Malaya,
the textile, paper, and tobacco industries are in the high direct import ratios
group while dwelling, bank, and forestry are in the low ratios group, and in theformer industry group the value added ratios are relatively low. Among them,60

NOBUKO NOSE

the textile import ratio is 697 and the highest in Malaya. In India, the rubber,crude oil, and other meta1 industries are in the high direct import group whileconstruction, iron ore, and forestry are in the low ratio group and in the latterindustry the value added ratios are high. Table 4 indicates that the rubber's
direct import ratio is 1000 and is the highest in India.

The average direct import ratios in Australia, Malaya and India are 78,
171 and 171 respectively and all are higher than the ratio in Japan of 57.0.
The Malayan and Indian ratios are higher than that of the U.K. which is 106.7.
Tables 2, 3, and 4 indicate that in the three countries, the direct import ratios

are higher in industries which produce or process non-natural products i. e.
crude oil and in the heavy industries i. e. chemical or iron and steel industries.

Tables 2, 3, and4 indicate that in the three countries the direct import ratios
are higher in non-natural products i. e. raw materials and in industries which
process the products. Table 3 indicates that in Malaya the intermediate importratios are low because her intermediate costs ratios are generally low. The
maximum is in the construction industry whose ratio is 234. In India, thesituation is different and the ratios are unbalanced, as in the rubber, forestry

and crude oil industry group the intermediate imports ratios are O, and maximum rate which is the construction industry ratio of 940 is higher than Malaya

maximum and that of Australia of 466. In Australia, industries being moreconnected with each other than in the other two countries, the intermediate
import ratios are higher than in the latter two, its average being 61.7. In the

trades and transport, construction, business services industries intermediate
import ratios are relatively high while the water, fishing and mineral oil in-

dustries are in the low rates group. As for total import ratios in Malaya inthe textile, paper, and tobacco industries they are high and their maximum isthe textile industry of 697. In the banking, forestry, services, and rubber
plantation industries the ratios are low. In Australia, the mineral oil, trade,clothing,metals and vehicles industries have high total import ratios of which themineral oil ratio of 527 is the highest of all Australian industries. On thecontrary, the water, gas, and fishing ratios are low. In India, the petroleum,rubber and crude oil industries' ratios are respectively high while the coal, ironore, and electricity industries' ratios are low. The highest ratio is the petroleum

industry with 1199 while the lowest ratio is that of iron ore which is O.07. It

is apparent that among them there being a slight difference of degree in the
maximum total import ratios of these countries that they are higher than thatof Japan's 438 and the U.K.'s 287 while minimum ratios are lower than Japan's

18 and the U.K.'s 53. This phenomena can be explained by the following

RATIOSFORTHEECAFECOUNTRIESCUMULATED COST
tendencies, i.e. one industry group whose ratio is high is extremely dependenton imports while another industry group whose ratio is low or close to zero is

independent of imports. In other words, their national economies are not
perfectly integrated as those of the Japanese and the U.K. economies. The
economy of Malaya is typical.
v Indirect tax ratios and subsidies ratios
Indirect tax and subsides are not proper production costs but institutionar

costs. As Table 2 shows indirect tax is divided into custom duties and otherindirect taxes of which the latter is netted out against subsidies in Australia.

On the contrary, in Malaya, indirect taxes are not subdivided further nor netted out against subsidies, while as for India, there is no column for indirect tax

and subsidies in Table 4. These are caused by the fact that the input-output
tables in these three countries which we have used as original data are made indifferent manners.

At Tabes 2 and 3 show, many industries are free from custom duty inAustralia and receive only a little subsidies in Malaya. Therefore, it may bepermissible to make a comparison of other Australian indirect taxes less subsidies ratios with Malayan indirect tax ratios and with the net indirect tax
rations in Japan and the U.K.
Table 3 shows that 16 industries are free of indirect taxes but for the restof the industries in Malaya the indirect tax ratios are high, especially in the
trade and transport, mining, and forestry industries. Through the intermediate
indirect tax ratios, all industries in Malaya pay indirect taxes. In the wholesale trade, mining, and transportation industries, the total indirect tax ratios

are high and are 46.7, 17.2 and 14.9 respeetively. On the other hand, Australian indirect tax ratios are higher than those of Malaya, the average net
indirect tax ratios i.e. the average direct ratios of 58.7, the average of intermediate ratios of 21 and the total ratios of 79.7 are higher than the indirect tax

ratios of 38, 14, 52 respectively of Malaya. Comparing these ratios with Japanand the U.K. we have the net indirect tax ratios in Table 1.2 showing that the
average direct ratios in the two countries are higher than Japan's ratio of 28.5

and the U.K. of 28.1, and in spite of the fact that their average intermediate
net indirect tax ratios are relatively low, their total net indirect tax ratios arehigh. The Australian average tota1 indirect ratios of 79.7 is highest of these.
countrles.
The highest indirect tax ratio group is that for alcoholic drink, tobacco,and mineral oil, the ratios being 678, 593, 238 per capita respectively. On thecontrary, in the dairy products industry the ratio is negative -111, which means

61

NOBUKO
NOSE

62

that subsidies to the industries whose profit ratios are low exceed indirect tax

on the products of the industries. Correlations between direct cost ratios andintermediate cost ratios for all final costs categories and that between direct
cost ratios and total cost ratios in the three countries are shown in Table 5.

Generally speaking, correlation coethcients between direct cost ratios andtotal cost ratios are high, especially the coefHcient between Malaya's direct import ratios and total ratios, the coethcient between Australia's direct indirect tax

ratios and total indirect tax ratios are also high. On the other hand, correlation coeficients between direct cost ratios and intermediate cost ratios are very

little and in some cases negative. Comparing the coethcients in these three
countries with those of Japan and the U.K.'s, we find that some of the coethcients in the three countries are lower than in the two latter countries. In Japanand the U.K. the coethcients are high especially in the latter and exceed 80%
as Table 5 shows. This fact still remains to be solved.

Next, we shall analyse the cumulated cost ratios from another aspect:
cumulation by final destination categories. From Tables 6 and 7, we find thefollowing situation.

i It is apparent that in the three countries consumption performs a mainrole in encouraging demand for fiscal factor costs because the cumulated cost
ratios for consumption items are the highest of all ratiosfor final destination.

The order of cumulated cost ratios are consumption, exports, fixed capital for-mation, government expenditure and inventory formation in Malaya andAustralia. In India, the order is not the same, being consumption, fixed capitalformation, exports, inventory formation and government expenditure.
ii Cumulative cost quotas for consumption in the three countries are, as
Table 6 indicates as follows. In Malaya, cumulative profit quotas are 36.7,
import quotas 24.6, wage quotas 19.2, in Australia, cumulative profit quotas are

34.2, imports quotas 11.8 and wage quotas 32.8, while in India, cumulativevalue added quotas are 77.1 and imports quotas 22.9 respectively. Among theimport quotas, Malaya's import quotas are the highest, followed by India while
Australian imports quotas are the least. In these countries cumulative imports

quotas for consumption are higher than the quotas of Japan of 8 and except

for Australia they are higher than the U.K. quotas of 14.2. The tendency
prevails in the cumulative import ratios for all other destination categories inthe economies.
iii Cumulative cost quotas for exports in these countries are as follows.
In Malaya, cumulative profit quotas, wage quotas and imports quotas are 39.3,
22.3 and 20.2 respectively, and in Australia, cumulative wage quotas, profit

63
CUMULATED COST RATIOS FOR THE ECAFE COUNTRIES

quotas, imports quotas are 37.6, 46.6 and 12.7 respectively. In India, cumulat-

ive value added quotas and imports quotas are 88 and 12 respectively, it isnotable that in Malaya and Australia cumulative profit quotas are relatively

high and among cumulative imports quotas in the three countries Malaya's
quotas are the highest.

iv Cumulative cost quotas for fixed capital formations are as follows. In
Malaya, cumulative wage quotas, profit quotas and imports quotas are 32, 31
and 20.5 respectively while in Australia they are 51.3, 31.9 and 12.5 re-spectively. In India, cumulative value added quotas and imports quotas are

76.5 and 23.5 respectively. Among cumulative imports quotas in the three
countries, the Indian quotas are the highest while the Australian quotas are theleast.

Cumulative cost quotas for Government expenditures are as follows. In
Malaya cumulative wage quotas, profit quotas and imports quotas are 53.7, 34.9,
9.57 respectively.

iv Cumulative cost quotas for fixed capital formations are as follows. In
Malaya, cumulative wage quotas, profit quotas, and import quotas are 32, 31
and 20.5 respectively and in Australia they are 51.3, 31.9 and 12.5 respectively.

In India, cumulative value added quotas and import quotas are 76.5 and 23.5
respectively. Among cumulative imports quotas in the three countri,es, theIndian quotas are the highest while the Australian quotas are the lowest.

v CumulativecostquotasforGovernmentexpenditures are as follows. In
Malaya, cumulative wage quotas, profit quotas, and import quotas are 53.7, 24.7
and 9.57 respectively while in Australia they are 51.3, 31.9 and 12.5 respective-

ly. In India, cumulative value added quotas and import quotas are 60.3 and39.7 respectively. It is remarkable that cumulative wage quotas in Australia
are very high and so are those of Malaya.

vi Cumulative cost quotas for inventory formation.
It is remarkable that in India cumulative import quota is great and also

these of Malaya which is 53.7. In Australia the dependency on import isrelatively low but that on profit is high.

vii From the above investigation, it is now apparent that final destination

categories which are labou; intensive are government expenditures and fixed
capital formations in Australia and in Malaya, and the categories which areprofit intensive are inventory formation and exports in Australia and in Malaya,

while import intensive category is the inventory formation in Malaya and in
India. In India, exports and the consumption cumulative value added quotas
are relatively high, so they are `employment intensive'.

64.NOBUKO NOSfi

vii Other remarkable point are that investment, consumption and exports
which consist of effective demand by private sectors in an economy generally
depend greatly on imports or are `imports intensive' in the three countries.
For example, in Malaya and India, the inventory formation depends heavily on

imports. On the contrary, government expenditure which is a target for economic policy depends very little on imports in Malaya and Australia but is` labour intensive '. In India, even government expenditure is `import intensive'.

Thus, this explains that the cumulated cost analysis for final destination cat-egories provides a tool for economic planning by the government. It isremarkable also that in these three countries import intensiveness is great,

especially in Malaya and India. The cumulative import quotas in the twocountries are greater than those in Australia, in Japan with 7.3 and in the U.K.

with 11.5 as Tables 7.1 and 7.2 show.

Thus it may be permissible to conclude that any increment in final demandin Malaya and India produce higher imports and lower income than in the cas(iof Australia, the U.K. and Japan.

Conclusion
Based on the above results, we reach the following conclusions about theeconomic feature of the three countries.

i These economies depend greatly on imports, especially Malaya andIndia, as the main destination categories are import intensive and the importratios are high.

ii Observing the import ratios and amounts of exports in the inputoutput tables, it is apparent that in these countries import ratios are high in

non-natural products producing industries and heavy industries and the products of home-produced raw material are exported. This tendency is especially remarkable in Malaya and India.

iii In Malaya and India, the direct rates of turn-over value are high andthe intermediate cost ratios are low. This indicates that they are developing

countries. On the contrary, the Australian economy is relatively matured
because (i) the intermediate cost ratios are relatively higher, (ii) wage ratios

are higher and (iii) imports ratios are lower than the ratios of the other two
countries and they export not only raw material but also processed products.
iv In these economies there are two types of industries i. e. the industry

group whose import ratios, wage ratios, indirect tax ratios are very high andthe industry group whose ratios are very low and some of which are often zero.

This tendency of such unbalanced growth of industries is apparently observed

65
CUMULATED COST RATIOS FOR THE ECAFE COUNTRIES

where we have made comparisons of cumulated cost ratios with those of Japanand the U.K. We regret that we can not divide final destination categories inthe three countries more in detail, i.e. consumption into durable and nondurable

consumption. Also, at this stage of analysis, we can not do further research
regarding the final factor costs categories by industry groups in the countries
mainly because the input-output tables in these countries are not standardized

internationally. We expect and intend to improve these points in the near
future. Moreover, we intend to compare the cumulated cost ratios in morecountries internationally and intertemporarily. These investigations will also
remain as future tasks.
Note :

1) N. Nos6, Cumulated Cost Ratios for the Japanese Economy in 1955,
The Review of Economics and Business Administration. vol. 10, 1965.

N Nose, The concepts and measurement of cumulated costs, KokuminKeizai-Zassi, Vol. 113, No. 3, Mar., 1966.

2) N. Nos6, ibid.
3) G. Stuvel, The use of National Accounts in Economic Analysis, Income and Wealth, series IV (London : Bowes & Bowes, 1954), pp, 319-321.
Stuvel, Systems of Social Accounts (Oxford : Oxford University Press, 1965),

pp. 227-230. G. F. Loeb, Experience with Input-Output Analysis in the
Netherlands, Input-Output Relations (Leiden: H. E. Stenfert Kroese N.V.,
1953), pp. 67--185. Central Bureau of Statistics, Cumulated Cost Ratios for the
Netherlands Economy in 1950. Statistical Studies, No. 6, Nov., 1955, pp. 3-30.

4) The author has used Input-Output Tables of Australia 1958/59 (Commonwealth Bureau of Census and Statistics, Canberra, Australia), Interindustry

Transaction of India,1960/61 (Perspective Planning Division, Planning Commission, and Interindustry Accounts 1960 of Malaya (Dept. of Statistics, Statesof Malaya, KL, Malaysia) as original data. These tables are included in the

Annual Reports for ECAFE countries, 1965.
5) N. Nose, The Concepts and Measurement of the Cumulated Cost, ibid.

Table 1.1 TheAverageCumulated Cost Ratios by Industry Group1

DAustralia

Gross Profits

Wages and Salaries
I

T

D

Custom Duty

I

Continued

Net Indirect Tax

D

I

T

D

5.1

O.9

6.0

58.7 l

21

79.7

38

14

52

266

198

464

249

159

408

183

54

237

276

94

370

r

Subsidies

T

T

I

g

Per Capita

D

T

I

India

L

Malaya

Table

Japan
U.K.

I

Per Capita

1.2 The Average Cumulated Cost Ratios by Industry GroupGross Profits

Wages and Salaries

D-O. 36

I=Intermediate Cost and T:=Total Cost Ratios.

D=Direct Cost Ratio.

Note:-O.2 J-O. 16

T

D

I

161.1

177. 0

338.1

l6I.3

251.1

314.8

196.7

511.5

175.4

108.0

Custom Duty[T

l i iT

D

Continued

Net Indirect Tax

D

I

T

28.5

26.3

54.7

28.1

18.6

46.6

1

413.4
283.4

Subsidies

D t

I

T

i
,
L

"

1

I

Table 1.1
1

L
D
Australia
India,

1 Malaya)'

Value Added

Imports

T

I

D

I

T

78

61.7

140

171

134 ,

304

458

243

701

171

22 l

193

459.8

147.9

607.7

1

1

,

Unspecified Item &c.

D

I

T

-42.1

-101.4

600

,roo

1000

-2

i
-5
16. 78

626

374
219

IOOO

I

T

D

I

3.1

3.6

6.7

-59.3

-3
21. 59130. 57

13.2

Total

[T

D

109.985Adjustment

4. 53

781

1

1000

Table 1.2

1

Imports

Japan
U.K.
'

D

I

57. 0

106.7

Value Added

T

D

59.1

116.2

384.6

49.4

156.1

I
500, 9Adjustment

Depreciation

T

D

I

885. 5

35.5

47.8

T
EB.4

I

Total

T

D

Tt..-

441.6

558.4

1000

627.7

372.3

1000

Z
o
tu
c

x
o
Z
o
m
NN

67
CUmoLATED COST RATIOS FOR THE ECAFE COUNTRIESAppendix to Table 2.

Industry
Agriculture

Dairying
Other Pastoral

Forestry & Fishing

Coal Mining
Other Mining
Non-Metal Mine Products
Chemicals
Mineral Oil

Metals, Engineering &VehiclesCord No.

1
2
3
4
5
6
7
8
9
10

Textiles11

Clothing

12

Grain Products
Confectionery13

Jam & Fruits

15

14

Canning16

Dairy Products

17

Other Food18

Alcoholic Drink

19

TobaccoWood Products
Rubber

20

LeatherPaper Products and Printing

Paper Making
Other Manufacturing
Building & Construction

Gas

Water
Trade & Transport
Dwelling Rent
Finance
Personal & Government

Services
Business Services

21

za
23
pt
25
26
27
28
29
30
31

32
33

sc

NOBUKO NOSE

os

Appendix to Table 3.

/

Industry

Cord No.

Agriculture & Livestock1

Rubber Planting

2

Forestry

3

Fishing

45
67

MiningFood Industries

Beverages

TobaccoTextiles89Clothing and FQotwear

10

Wood and Cork

11

Furniture & Fixtures

12

Paper & Paper Produces

13

Printing & Publishing

14

Leather & Leather Products

15

Rubber Processings

16

Rubber Products

17

Chernical Products

18

Non-Metalic Mineral

Produets
Basic Metal lndustries ,Metal Products,

Machinery, etc.
Misc. Mannfacturing

Industries

19

20
21

22

Constructjon

23Electricity, Water

za

Transportation &Communication

25

Wholesale and Retail Tradeas

Banking, Insurance, etc.

27

Dwelling

28

Other Service Industries

29

Table 2. CostRatios

by Australian(1958-59)

Industry.

Per Capita

Wages
Cord
No.

D

Cord
No.

I

32

631

26

1,211

5

30

33

523
487

10

10

426

L 20
25

i

T

i No.

l

Cord l
No.

i

D

Cord
No.

Cord

I

No.

T

eord
No.

o.o

26

10• 9

1 10

14.8

305.3

2

g•.s']

34

26

10.9

26

295.3

3

3.9

12

3.9

137.8

23

'
283.8

4

F

12
32

5.6i
1

:[:

32

3.8

3

106.6

8

280.6

5

8

141.4

1

11

245.1

6

3.0
2.6

23

133.9

17

82.6
66.2

o.o
o.o

•, 8

34

l
183.7

7

o.o

20

19

126.2

8

41.7

24

lijglgl

8

23

2.3

23

22

64.2

20

16

1.9•

16

L9

26

40.7
39.0
27.3

15

41.7
32.3

o.o
o.o

25

162.2

10

17

1.7

17

1.7

7

23. 7

33

159. 0

11

o.o
o.o

7

L5

22.3
20.9

19

134.2

12

7
11

1.5

13

ilg

11

1.5

3

115. 6'

13

1

1.5

19.7
18.8

1

100.9

14

6

l[l

6

17

74.1

15

18. 0

15

7L3

16

29
25

1.1
1.1

g[g

20

69.0
68.0
49.3
28.3
22.3
20.9

17

129

9

236. 5

34

74.8

30

8

238. 934173. 2

14

101

10

42

25

126

3!

130.8

8

55. 7

9

238. 211226. 3

10

779

10

87

33

39

26

107

30

92. 5

10

43.6

31

181. 6

1

774

11

12

27

14

102

1

40.9

26

24

23

10

672

21

3

18

30

gg

33

49.8
40.3

33

280.9

64
57

140.9
101.9

12

3

,ro.5

33

355

31

29

521

8

51

1

14

11

68

3

30. 0

17

24.8

34

282

3

278.8
267.7

4

497

26

17

12

34

65

32

29.7

1

22. 0

1

251

12

208.3

28

475

15

36
31

20

11

21

62

2

26. 6

12

17.2

3

25

243

20

164.8

33

473

20

23

8

7

8

ss

5

23. 1

29

16.5

8

499

24

243

7

137.6

17

461

30

5.2

33

15. 0

10

236

1

132.7

23

tlt;6

23

21

5.0

15

7

13. 7

23

11

4.0

20

sc

26

13

4

3

26
19
18
12
9
5.2
4.0
3.8
3.3
3.2
2.9
2.8

20

16.9
15.7
14.5
14.2

23

27

43
35

23

455

23
14
12
8
6
5
4
o
o
o
o
o
o
o
o
o
o
o
o

31

25

25
7

12

649

28

4Q8

31

289

23

628

29

21

385

23

277

20

597

6

28

372

29

241

7

560

8

30

370

17

236

5

547

30

23

351

7

230

29

530

6

349

3

34

27

345

20

207
178

4

'

'

'

944

745

26

641

30

638.7

31

629
512

10

494.7

30

908
889

17

317.2

2

781

494
474

34

313.0

3

33

312.3

407

870.9

26

22

341

8

140

17

453

7

227

8

117.1

8

399

34

7

330

140

21

419

20

223

29

113.6

6

395

3

26

317

1
24

83

4

413

5

217

13

109.1

20

387

2

29

288

15

27

398

21

181

24

11

6

396

32

178

15

24

365
331

1
33

11

284
268

13

60

28

375

10

177

11

12

323

4

8

232

18

8

373

14

172

l8

34

313

5

24

229

27

55
53

88.2
86.3
84.4
55.0

7

12

83
61

22

352

23

165

16

282

6

226

16

3

338

33

161

6

41.8
40.1

25

14

27

7

17

217

6

11

330

15

159

25

38. 4

15

263
245

9

15

205

32

36

24

313

9

155

2

35.4

13

243

13

3

130

21

34

31

289

22

148

32

26. 5

5

236

16

34

1

25

10

364

31

37.9

30

53

12

9

30

254.6

34

593.0
255.4

287.3

122

414

15

289

1

249

21

18

73
71
59

19

58

4•

26.3
23.8
20.4
19.8
18.2
16.6
16.3
2.9

28

L8

17
11

143
136

27
19

22
21

14

224

13

134

14

13

181

12

115

5

146

26

18

106

16

22

20
14
ll

16

4

4

19

28

3

9

19

14•8

12

26

4

25

10

30

667

38
35
33
o
o

39.7

24.0

521. 8

32

2

T

33

9
21

430

19

'
lCord
No.

I

34

678. 0

19

33

9

No.

19.2

18

87.4

418

14

D

35.5

162. 9

26

3

98

T

C6rd

33

673.1
590.5

30

19

918

51

C.) ggl

30

18

215

33

18

No.

915

499

16

I

No.

12

34

24

D

19

31

5

No.

Cord

65

077

108

T

Cord

71

1

1

I

Other Imports

Imports of Goods

Cord

30

10

31

No.

Cord
No.

26

900
650

2

D

Tax Less Subsidies

188

1

121

T

Cord

913

2

271

1

13

No.

No.

Other Indirect

Cord
No.

19

529

1

30

47
47

D

Custom Duty
Cord
Cord
I

1

26

:

,

Profits

Cord

2

1

67
59
54

34

o

9

22

11

32

221

204

17
18

21

200

22

14

192

9

172

24
27

22
18

164
114

28
29

16

113

31

19

81

32

o
o
o
o

10

145.7

10

20

33.1

7

33

25.6
19.2

12

1

18. 3

11

7

30

5

25. 0

34

25

20

3

6

4.3

11

24.0
19.1

16.4
10.5
9.0

21

25

7.0
4.9
4.5

27.2
25.4

5

8.9

16

16.5
14.6
13.8

32

3.9

15

17. 8

6

8.8
7.9
7.6
7.4

18

12.2

2

6

IL2

13

32

9.5
8.0
6.1

29

3.2

13

2

3.0

18

6

2.9
2.8
2.0

32

1.9

16

5

1.4

29

1.9.

9

1.I

5

LO

9

L4
Ll

22

14

22

O.9

22

O.9

14

24

O.7

24

6

27

O.6

27

12

LO

16

4

O.3

4

34

O.2

28

o.o
-11.67

28

28

O.7
O.6
O.3
O.2

16

25

28. 2

7

13

12

17

31

4

168.9

29

3.3

28

8L2

14

9.8
9.5

32

29

139.8

10. 0

2

8

33

15

3.8

6

176.2

20

18

19

21

12. 2

17

15

149. 9

33. 6

4

7

23

2

11.7
11.7
9.9
9,6
9.5
8.7
8.3
7.8
6.5
6.4
5,7
4.0
3.8
3.3
1.7

16

3o7. ol

23

1

17

10

10.1

23

27

165.6

11.1

4

21

319.4

30

13

4

11

12

31

15

24

34

9

74.8
71.8
70.5
62.2
59.3
34.9
33.6

23
25

29

527.3
482.9

466.5

11
2

18

15

2

29

31

27

3.6

25

16. 7

17

21

3.0
2.6

13

14.9
12.5
12.5

18

L2

9

O.8
O.4
o.o
o.o
o.o
o.o

5

24
19

2.5

21

24

2

4

5

1.9

27

12. 3

29

9

L7
L5

28
4

16

O.7
O.5
O.4
O.3

6
14

6.8
6.0
6.0
5.5
4.0

16

-].11.1

22
14

4

22

32
13

27

28
31

5.7

19
14

,

5.5
4.8

9

l4

22
7

6

18
31
16

24

4.5

5

27

4.1

32

22

3.8

4

4

1.0

27

28

O.6

28

o. o'

o.o
o.o
o.o
o.o
o.o

3

;I2

1

glg

21

giij

21

o.o
o.o

22

o.o

18

20

23

13.7
gl?

27

24
25

26

28
29
31

32

25
15

31
13

18

3

29

15

19

i

20

o.o
o.o
o.o

20.0
19.8
14.6
14.6

alg

::1 2,1

33

31
13

gl2

O.5
O.5
O.3
O.3

19
9

9

o.o
o.o
o.o
glg

27

14

2

g[g
gl:

28
22
4

gl2,

O.8
O.8

O.6

o.o
o.o
o.o
o.o

2
24

O.9
I
O.9

18

19
gl:

2.4
2.3

O.8
O.7
O.6

21

5

5

88.8

24
27
14

O.2

28

O. 2.

22

0.2
O.1

4

i

Table 3 Cost Ratios

by Malayan Industry (1960)
Per Capita

I

Wages and Salaries
cfigp

D

cgg?

I

c.•

L

Profits

1ge[ T

eegp

I ICft.d.eNd(lo o?

D

T

Primary Factors of Production

Code
No.

D

Code

I

No.

Code
No.

Imports

T

Code
No.

cNod
.P

D

Oode

I

No.

T

Code
No.

D

Cede

1

Subsidies

Indirect Tax

i iC.Od.Pl T

Code
No.

No.

(i

D

iogp

Ii

c.o .d

t T

P

29

749

23

386

29

750

28

900

23

601

28

930

2

976

23 1,054

23

1, 383

9

697

23

234

9

697

26

419

20

128

26

467

15

o

5L

o

E 1
13 1

2

408

16

374

23

646

4

795

16

507

4

796

29

948

16

900

26

1,169

13

657

20

70

13

657

5

167

11

81

5

172

13

o

25

o

9

o

25

351

20

194

16

424

1

693

20

407

1

752

28

926

20

730

16

1,026

8

654

10

55

8

655

3

148

23

67

25

149

9

o

3

o

7

o

27

304

ll

142

2

408

2

550

6

38tl

23

669

4

924

11

483

28

987

7

286

25

48

23

470

25

144

26

47

3

148

7

o

20

o

22

o

12

291

26

129

25

403

3

486

11

260

16

584

3

900

6

452

5

982

21

270

26

46

20

339

27

85

16

21

20

128

10

o

27

o

4

o

14

266

5

70

12

313

5

425

5

121

2

551

26

897

26

272

2

977

20

269

6

44

7

287

28

26

6

12

27

85

14

o

11

o

27

o

3

265

6

55

27

304

27

424

18

99

5

547

27

813

5

197

29

952

14

242

5

31

21

271

1

25

1

10

11

81

17

o

28

o

3

o

21

263

25

51

11

290

24

395

26

95

3

486

5

784

18

120

4

925

23

235

1

20

14

243

18

24

18

7

23

67

22

o

29

o

15

o

23

260

10

28

14

266

26

379

1

58

26

475

1

780

25

95

3

900

15

235

28

18

15

235

2

22

12

6

1

35

4

o

12

o

10

o

24

220

28

27

21

266

7

338

25

38

6

"9

25

733

1

as

1

866

19

181

18

15

10

201

29

21

5

5

18

31

8

o

24

o

14

o

5

191

12

21

3

265

19

308

28

29

27

424

24

615

28

60

25

ew8

10

146

24

15

19

183

6

1

25

5

28

29

21

o

19

o

21

o

7

187

24

21

5

261

14

280

12

29

24

418

14

546

10

57

27

814

22

140

16

11

6

144

4

1

24

3

29

23

19

o

21

o

19

o

17

179

1

17

24

241

10

268

10

28

20

416

7

525

12

57

ll

751

12

133

19

2

22

141

23

O.2 28

3

2

22

24

o

4

o

24

o

10

170

18

14

26

227

25

237

24

23

11

379

19

471

24

48

20

748

17

126

12

1

25

139

24

o

19

2

16

21

l2

o

22

o

12

o

19

162

19

6

20

203

17

194

19

12

7

339

10

439

19

2I

24

663

18

108

8

1

12

135

22

o

21

2

6

13

6

o

14

o

29

o

11

148

17

5

10

199

18

184

8

10

19

321

21

425

17

14

6

598

6

100

17

1

17

128

21

o

8

1. 58

12

6

16

o

10

o

28

o

4

127

21

3

7

188

29

177

17

8

10

297

12

380

8

13

14

549

24

96

21

1

18

124

20

o

29

1. 49

24

3

29

o

7

o

ll

o

15

117

8

1.75

17

18il

21

162

21

5

18

284

17

373

21

ll

7

528

1

95

11

1

1

116

16

o

22

O. 81

19

2

28

o

9

o

20

o

9

116

7

1.10

19

169

11

l19

22

2

14

282

23

328

22

4

10

496

25

91

7

O. 83

24

111

17

o

2

O. 66

21

2

18

o

13

o

25

o

26

97

22

1.08

6

135

15

117

14

1.55

25

276

11

267

29

3

19

492

4

62

22

O. 38

5

94

16

o

17

O. 55

8

l,5

23

o

15

o

5

o

4

127

12

89

29

1.52

17

202

18

260

14

2.84 12

437

5

56

14

O. 34

4

56

15

o

14

O,44

4

L3

11

o

2

o

26

eeO. Ol

1.42

29

179

15

235

7

2. 76

21

436

16

40

29

O, 16

16

51

14

o

4

O, 37

22

O.8

27

o

26

eeO.Ol8

eeO. 02

2 l

O. 67

21

167

9

186

2

1,65 17

387

11

19

9

O.11 26

50

13

o

10

O, 24

17

O.5

20

o

8

eeO. 0217

acO. 03

15

O.53

15

118

22

147

9

O.95 18

381

2

10

15

O. 08

11

20

12

o

7

O. 23

14

O,4

3

o

17

acO. 0323

acO. 04

1

22
6

87
79

14

29

1
O. 85
O. 73

15

117

16

77

I

7

[

1

[

o

L

1

63

2

O. 32

9

116

8

74

13

57

9

O.28 22

88

9

69
l

18

51

4

O. 18

1

80

23

68

9

O. 51

12

118

6

145

4

O. 94 l5

235

26

3.

3

2

O. 07

28

18

11

o

3

O. 23

10

O.2

25

o

23

acO. 04

18

-O.2

16

49

3

O.11

18

65

6

64

4

O.38

8

en

16

126

15

O,65

9

l87

29

L

1

4

O. 04

2

10

10

o

9

O,l5

7

O.2

5

o

1

acO. 04

6

eeO. 39

8

45

15

O. 07

13

57

22

60

3

O.23

9

70

8

119

3

O.57 22

151

3

3

O. 02

29

L3

9

o

13

O, 12

9

O.1

26

o

18

eeO.2

1

ee1.64

20

8

13

O.06,
1

8

47

13

57

13

O.12 22

62

13

ll4

13

O.29

8

133

27

27

O. Ol

3

O. 02

8

o

27

O.12 13

O.1

1

ac 1606

eeO. 3916

ee3. 8727

O.06 28

27

20

9

27

O.12

57

20

17

27

O. 29

13

114

28

13

O. Ol

27

O.Ol

7

o

15

O. 05

15

O.05

2

ee 42716

ee3.872

ac4. 27

28

13'

THEECAFECOUNTRIESCOSTRATIOS FOR
CUMULATED
Cost Ratios by Indian

Table 4

Industry

69(1960-61)
Per Capita

J,

Value Added

Cord
No. '

D

21

923

Cord

724

6

18

896

20

538

15

847

14

485

+

1

r

374

5

832

28

tCord
No.

2,023

1

897

07

I

Ne.

Importsli

TlCordIDNo.

c.o .r gl

I

'Cord
, No.

T

'

Ol

2,296

26

1,OOO

23

940

23

1, 199

15

1,153

24

926

22

511

26

1,OOO

28

1,111

9

606

5

494

24

926

18

1,037

5

399

1

412

5

894

20

1,022 L 19

340

15

244

9

696

06

1, O08 '
3

311

6

206

6

516

11

821

16

363

30

817

27

359

02

991

6

310

27

139

22

511

13

811

15

306

21

923

27

281

18

132

3

425

2

742

28

278

11

oo3

23

258

3

114

27

421

2

249

13

898

4

256

14

109

1

412

10

180

16

98

4

346

19

345

15

279

1

f

l
l

F

10

736

22

532

22

233

07

898

20

tl8ti

4

207

30

876

18

56

4

oo

17

373

l2

164

22

765

25

fo

9

90

371

8

154

10

744

11

41

28

88

348

18

140

16

708

15

35

11

344

9

104

l 14

6ee

21

27

335

25

l

89

27

667

20

13

:
1

87

05

601

04

8

!

l 25
i 16 I
1

4

i

L

I

,

308

:

82

i

l

20

66

14

116

25

2

50

11

115

13

16

25

35

16

103

5V2

l4

7

17

en

20

92

188

292

11

i

284

23

J 80

08

526

16

4

13

31

28

as

1

273

3

77

25

437

8

8

22

25

82

12

249

17

59

17

432

12

L9
L5

12

22

2

50

3

248

30

ss

12

413

30

O.9

29

11. 1

13

os

5

226

29

30

03

325

17

O.7

30

7.1

17

sc

203

19

17

19

310

1

o

19

5.1

21

27

173

10

7

09

262

2

o

10

2.1

8

24

157

7

O.6

23

254

7

o

7

O.3

12

23

29

150

21

o

29

180

22

o

21

o

29

11.1

24

66

24

o

66.5

28

o

24

o

30

8.0

o

29

o

26

o

7

O.3

19
i

l
1

182

'

l

27

73

[ 18
j 10

6

j

14

23
9

t

T
J

i 26 r

o

r 26
d

o
/

i

1

24
26

r

1
r

I

E

'
NOSE
NOBUKO70

Appendix to Table 4.
Industry

Cord No.

Construction, Urban &Industrial

1

Construction, Rural

2

Electrical Equipment

3

Transport Equipment

4

Non-Electrical Equipment

5

Iron & Steel6

Iron Ore

7

Cement8

Other Metals

9

Other Minerals

10

Plantations

11

Leather & Leather Products

12

Animal Husbandry

13

Food Industry

14

Food Grains

l5

Cotton & Othert Textiles

16

Jute Textiles

17

Other Agriculture

18

Chemical Gertilizers

19

Grass, Wooden & Non-Metalic
Mineral Products

20

Forestry Products

21

Motor Transport

22

Petroleum Products

23

Crucle Oil

24

Rubber Products

25

Rubber26

Chemicals

27

Railways

28

Electricity

29

Coal

30

Table 5.

The Corelation Coefficients Between Direct Cost Ratios and Intermediate
Cost Ratios and Between Direct Cost Ratios and Total Cost Ratios

Imports

Wages

Profits

Value Added

Custom Duty

R(D.T) R(D.I)

R(D.T) R(D.I)

R(D.T) R(D.I)

R(D.T) R(D.I)

R(D.T)I R(D.I)

Net In Direct

Subsidies

Tax
R(D.T) R(D.I)

R(D.T) R(D.I)'

Australia

O.738 -O. 109

O.579

O.699

O.618 -O. 149

MalayaO.973 -O.020

O.799 -O. 169

O.741 -O. 368

India

O.791 -O. O04

Japan
U.K.

O. 921-O.040

O.975

O.067

l

O.950

O.093

O. 983

O.O03

O.993

O. 022

O. 993
O. 609-O. 375

O.7tS -O. 052

O.521 -O. 158-O. 162

O.831 -O. 136

O.823 -O. 531

O.981 -O. 307

O.918 -O.422

O. 936

O.516 -O.871-O. 1881

Note:

D==Direct cost ratios, I=Intermediate cost ratios, T=Total (cumulated) cost ratios

a
Åë
K
c
v
>
H
m
v
o
o
m
H
pa
)•

Table 6. Cumulated Cost Ratios by Destination Categories

AU
Wages & Salaries
Entrepreneurial Income

Government

Consumption

Cost Categonie

i iN
!

MA AU

512 [) 535
492

230

141

439

77

Custom Duty

147

Indirect Tax 1)

o

170

41

SubsidiesoO.1

Imports 2)
Other Imports

171

159

5

Note' 1)

2)
3)

MA AU 1 IN

694

1,195.1

Exports of Goods

StocksMA

MA AU IN MA AU

IN

2.6

103

} 169

5.9

127

175

99.8

61

111

62

19

28

69

60

26

O.7

o

O.9

o

O.1

o

O.7

o

9
o

3.6

8
o

6.7

2

O.2

o

o

o

9
o

O.2

oo

6

22

} 44

o

29

26

11

} 451

136

1

251. 7

73

115.4

50

215. 9

12.9

587

195.3

34

37. 7

23

43

2.7
53.2

90.4

O.7

25

Indirect tax in Australia is all indirect taxes except custom duty less subsidies,This item consists of imports of goods only.
AU, IN, MA are Au$tralia, India and Malaya respectively.

} 27

O.1

8

191
1,497

Investment inFormation

2

Unspecified Itm.

Sub Total

294

IN

Per Capita

Private Fixed Capital

Expenditure

H
H
o
m
-o

77

24. 3

273, 4

192

pa

H
:
m
m
o
>
-ta
o
o
Åë
z
H
pa
H
m
m

447,2

and this in Malaya is all gross indirect tax.
pl

,Cumulative Cost Quotas by Destination Cate gorles

Table 7.1

Government

Personal

AU
Wages and Salaries
Entrepreneurial Income

Imports

IN

MA AU

34.2[
l 77.1
32.8I

20. 8

56

MA

IN
l 60.336.7 30.6
ll.8 22.9•

24. 6

9.5

Custom Duty

9.8

o

O.028

Net lnairect Tax 1)

IL3

3.4

O.36

39. 7

Inventory

Formation

Formation

Au l iN

MA AU

IN

} 35

53.7 51.3 l 76.5
24.7 31.9
9.5 12.5
23.5
O.041

32

35.7

31

48. 8

20.5

11.5

O. 37

3.5

7

16

Total

MA AU
ll

37. 6

24.8

46. 6

IN

MA

} gg

22.3

53.7 12.7

65

O. 19

O. 328

3.8

O.25

39.3
20.2

12

8.5

100

100

100

IOO

100

100

'Personal

Consumption

9.6

12.8
100

100

IOO

Table 7.2 CumulativeCost 9uotas by Destination

100

Government

Fixed Capital

Expenditure

Formation

JA

U.K.

JA

U.K.'

JA

37

34.3
48. 9

49.5

54.9
28.9

44.9
42.7

59.8
26.8

Imports
Net Indirect Tax

8

7.3
6.1
O.4

11.5

11.5

4.3
-9.6

6.1
4.5
1.8

16.1

8.7
O.1

44.6
28.9
14.2
11.1
-10.8

24.5

Profits

2.9

6.4

-5.6

100

100

IOO

100

100

100

`Adjustment, in U.K consists of final buyers' resale.

JA indicates Japan.

IOO

leo

100

%
Exports

Formation

Wages & Salaries`Net indirect tax' in Australia is all indirect taxes except custom duty less subsid

IOO

Inventory

U.K.

Adjustment 2)

100

L

Categories

JA 3)Note; 1)
2)
3)

i

ExPorts

O.02

Subsidies
Unspecified items

Total

%

Fixed Capital

Expenditure

Consumption

Fi]

U.K.

JA

49.4
25.8
20.5

14.4

o

4.06
O.24

O.5
4.5

100

100,

100

57.6

36.5
44.1

ies an d th is in Malaya is gross indirect tax,

U.K.
51.4
28.5
i4.9
4.8

O.4
100

z
o
w
Åë
x
o
Z
o
m
MN

73

INTERNATIONAL LI9UIDITY CONTROVERSYIN JAPAN (1)Masahiro FUJITA

I
With the appearance of the Trtlfi7n plan, the controversy of international(1)international monetary system in Japan is gettliquidity and the reform of theing stronger day by day. Here we define the international liquidity conception,
as follows : It depends upon how to liquidate international debt and credit as

derived from the international payment relation and international trade, thegold exchange in place of the gold. And, another concept implies the liquidabi!ity of gold of the dollar exchange itself. Therefore, the above-mentioned

two definitions must be distinguished more accurately. In other words, weknow the large and clear difference between liquidity of gold and of the dollar,
for dollar clairn we consider international liquidity as containing all the oMcia!

reserves for the quantity of the world trade and credit facilities from private
and official financial institutions. From a broad definition, international liqui-

dity implies credits from the IMF and funds or loans from the government andcentral bank, added to the general private creditability of othcial and private
financial institutions, namely, it implies the international financial strength.

Then, it is necessary for us to look into the various reforming proposal

for the international monetary system in Japan. In this work, we would liketo introduce faithfully and examine the Matsumura plan, the Horie proposal,(2) (3)and finally the Miorataplan. The examinationof many other famous plans(4)
will be taken up at a future date. As we are already familiar with the Kojima
plan (lent currency proposal) and the plan of the Japan Economic Research(5)

Institute and others, we should Iike to study the above-mentioned three plans(6)in this paper.

II
Professor Zentara Matsumura proposed the following plan for the reformof the intemational monetary system, with the intention of helping to advancethe present arrangements.

(1) Gold subscription to the IMF is to be strictly observed, and theFund's investment is to be stopped immediately. Specifically, Article III.

74

MASAHIRO FUJITA

Section 4(a), which provides that 25 per cent of a quota increase be paid ingold, should be rigorously adhered to, as is being demanded by the French andthe Dutch. The extension of gold tranche rights without gold payment orwith means other than payment in gold-e. g. in callable gold certificates, assuggested by the Ossola Report, should be categorically ruled out. Should
gold certificates be issued in exceptional cases, they mast be redeemed by gold
within five years, i. e. before the next quinquennial increase of quotas comesaround. However, the concession in Article III that a member whose monetary reserves are less than the new quota may reduce the proportion of theincrease to be paid in gold, should be maintained. The majority of developing
countries, taking advantage of such a relaxation, could be exempted from pay-ing gold, sometimes to the maximum extent of zero payment. For advanced
members, on the contrary, who are likely to claim greater voting rights byacquiring larger quotas, the extire payment of gold should be made obligatory.

Otherwise they might make exaggerated claims for increasing their own
quotas. In short, full-fledged members should contribute to the concentrationof gold in the IMF in proportion to their voting power in the Fund. In thisway we can enforce and honour, indirectly through the IMF, the rule of gold.
Because we believe that, as General de Gaulle proclaimed, " doubtless no one
would think of dictating to any country how it should manage its domestic
affairs, except through the supreme law, the golden rule ".

Now that the outcome of gold subscription to the Fund, the gold tranche,

may be included in the reserves of members, being automatically available,

payment of gold to the Fund does not mean any material reduction in themember's liquidity. The gold transhe thus acquired might be compared with
the initial compulsory deposit proposed by the Trzlfiin plan. It is not convertible into gold but is as fully usable as gold in international transactions. If non-reserve currency members turn their dollars into gold at the U.S. Treasury inorder to meet the need of their gold subscriptions, this would contribute to thegold concentration in the Fund far more to drastically than the Triflinian

method. For under the Trz:fi7nplan, the reformed IMF would start off withcompulsory deposits of stipulated amounts (not convertible into gold but asfully available as gold for international transactions) and, in the meantime, if
the dollars were paid in, they would be gradually liquidated at the rate of 5 percent a year. It is of great interest that the Fund's Articles of Agreement con-tain such drastic items which would concentrate gold in the Fund, shipping

over the two steps proposed by Professor Triflin. Any reform plan of theworld's money, if it deserves universal acceptability, must contain a scheme that

CONTROVERSYJAPANIN (1)
INTERNATIONAL LIQUIDITY
would ultimately lead to gold concentration in a central organization automatically through the working of its own mechanism.

The Matsumura plan also shows the next proposal. It states that the
Fund's gold investment in reserve currency countries should be suspended
immediately. Unquestionably, the gold subscription rule in the general quota
increase, if it is adhered to, would inevitably cause a severe drain on the tworeserve currency countries, because countries holding dollars or sterling would

convert their holdings into gold to meet the subscription obligation to theFund. In order to soften such an impact, the Fund is making a practice ofselling gold to reserve countries. In the coming quota increase, the Fund isagain going to deposit gold in both reserve countries up to $350 million, of

which $250 million will be for the United States and $100 million for theUnited Kingdom. Americans support such a gold investment as an indispensable measure to defend the go!d reserves of key currencies. But the key currency system should not be identified with the IMF. If we recall that the IMF
emerged as an antithesis to the key currency approach propounded by Professor
Jhon H. Williams, we suspect that gold investment for strengthening the key(7)currency system might run counter to the spirit of the Bretton Woods Agreement. Furthermore, now that the dollar can hardly be regarded as a scarcecurrency in the Fund, the Fund's method of acquiring abundant dollars withthe sale of gold, might be interpreted as a violation of Section 2 of Article VII

which provides for the sale of gold by the Fund only when it is required toto rep!enish the Fund's holdings of scarce currencies.

Since the transfer of U. S. gold to the Fund through gold payment byother countries reinforces the lending capacity of the Fund, the United Statesshould use the Fund on a larger scale, instead of relying solely on the gold in

her own possession. The U. S. automatic right to borrow from the Fund has
been much improved, because her gold tranche has expanded in proportion to
the repeated increase of her quota. But the more the Fund sells gold toreserve countries, the less reliable is the gold value guarantee given by theFund to the GAB, and the more diflicult it becomes for the Fund to cater tousable currencies available for the defence of the key currencies.

Expressed differently, for America to buy gold from the Fund is, as aJapanese saying goes, " to strangle one's neck with one's own hands ".

Secondly, Dr. Matsumura states (2) the creation of a New Reserve Assets

out of GAB. As abovementioned, when the GAB is activated the Fund issues•
to a lender, on request, non-negotiable instruments showing its indebtedness.
In order to bring up new reserve assets out of these notes, we propose to make75

MASAHIRO FUJITA

76

one simple, though important modification, following the suggestion by Pro-

fessor A.C.L. Day "to provide that the new notes should be repayable on(8)demand insteadof simply when a holder has a payment deficit". In present
circumstances, the holders of notes would be Western Continental countries

which have no need to demand repayment before maturity due to balance-ofpayments reasons. Since under the present arrangements, a lender country is
prohibited from transferring all parts of its claim to repayment without the
Fund's approval, our step is to modify this clause and give the notes a complete

transferablity among the participants of the GAB. This would make theholders regard their notes as reserves. The transferable notes could then meetthe liquidity requirements among the participating advanced countries. In
order to make the notes so attractive to the holder (virtually gold preference

continentals) that they would hold them as long as possible, we must strengthen the gold clause on the notes by preventing gold diversion from the Fund,
as mentioned earlier.

The maximum ability of GAB in accommodating needed currencies is only
$3.2 billion, after the coming sound of quota increases, the quota of the UnitedStates will swell to $5.160 million and her potential borrowing right will
expand to $6,450 million (125 per cent of her quota). Unquestionably theFund could scarcely accommodate enough continental currencies to meet thedemand. In addition to this, we must take into account the borrowing potential of the United Kingdom amounting to $2.965 million, which corresponds to

her revamped quota of $2.444 million. It is clear that the Fund could notprovide, through normal channels, usable currencies to meet the demand ofboth key countries. As the usable currencies would
consist chiefly of Western Continental currencies,

GAB quotas for Germany, France, Italy, theNetherlands, Belgium and Switzerland should be
doubled at least, leaving those of other participants
unaltered.

Professor Day recommends as a next step that

the Fund (or its Reserve Stabilization Account)accept further deposits by members of gold dollars,or sterling in exchange for these Fund notes.

However, we suspect that his step is years
ahead of its time. Only after having completed
the liquidation of the past (discussed below) should

the Fund embark on a plan of accepting gold and

New Quotas(equivalent in million

U.S. dollars)Germany 2.ooO

France 1.100

Italy 1.100
Belgium 300
Netherlands 400
Switzerland 400
5.300
unaltered:

UK 1.000
US 2.000Canada 200

Sweden 100

Japan 250

INTERNATIONAL LI9UIDITY CONTROVERSY IN JAPAN (1) 77
other deposits from members in exchange for their notes.

The time is not ripe yet for the Fund's notes to blossom out into fullfledged reserve assets. Nor are we so short of liquidity as to have to supple-

ment it with new reserve assets by ascertaining then rudimentary form ininternational monetary cooperation developing among the advanced nations.
The Ossola Report suggests that the United States (likewise the United King(9)dom) draw
the currencies of dollar holders-chiefiy Western ContinentaJ
currencies-from the Fund and use them to buy back the dollars from theholders.

Finally (3), reinforcement of liquidity in general through normal IMF
channels.

The Fund's holding of dollars has been on the increase since 1959. Although the leading European countries had achieved a de facts convertibility atthe end of 1958, it was in February 1961 that they accepted the provisions ofArticle VIII and acquired de jure convertibility for their currencies.

The IMF serves to kill two birds with one stone : first an outlet is provid-

ed for the dollar glut in the Fund, and secondly underdeveloped countries arehelped over critical payments dithculties, In giving financial assistance, theFund would have to be concerned with the leakage of the dollar. Untied
dollars to be provided by the Fund would have a larger leakage and in turnhave an impact on the American gold stock.

However, if the leakag.e should increase the Western Continental dollar
reserves.

There is every prospect that in the near future the Fund's financial assist-ance will and should be increasingly made in dollars. When the dollars are
drawn, the United States will experience an improvement in her Fund position
and this will automatically accelerate the restoration of her gold tranche right.

It will also ensure that member countries overtime temporary payments problems. In connection with aid to developing countries, we must stress the factthat the traditional method of financing which has been pursued by the Fund,is most suitable in distributing liquidity to the world. Since drawing from theFund is conditional beyond the gold tranche, it can combine the liquidity
approach with the adjustment process.

III
The former president of the Bank of Tokyo, Dr. Shigeo Horie, a great
expert of international monetary problem in Japan, proposed the following
remarkable plan.

MASAHIRO FUJITA

78

First of all, Dr. Horie divided into the following three groups the various

arguments for reform of the IMF organization :1. The current question can be solved within the framework of the IMF
Agreement, and even if an attempt be made to reform it, it should be done
slowly and progressively. Such a view has been called, previously, an argument for conservative reform.

2. Another view advocates a progressive and important reform of thepresent Agreement. This is named an argument for positive reform.
3. It is necessary to make a fundamental re-examination of the present
Agreement and reform the IMF itself. This may be labelled an argument for
fundamental reform. We, at once, may point out the Trilfi7n plan as a typicalplan. In addition to these proposals, there was another for return to the gold

standard system advocated by Jacques Rueff, economic adviser to President de(10) Heilperin. In short, they point to the elements
Gaulle, and Professor Michaelof instability inherent in(11)the present gold exchange standard system, which has
national currencies such as the dollar and the pound sterling as international
currencies, and insist upon its abolition and upon a return to the complete gold

standard system of former days. However, they put forward an concrete
proposals for dealing with the liquidity shortage to be expected from a returnto the gold standard system. Here, we merely mention the existence of thisview-point, without, however, going into details.

Moreover, there is another measure which is capable of solving the problem without resorting to a reinforcement or reform of the IMF system as
above-mentioned. It is to increase the price of gold as consistently advocatedby Sir Roy Harrod. This proposal is, no doubt, very attractive to those who(12)

are pessimistic about the future of international liquidity. But, we cannot
agree with Horie's estimation of the Harrod plan, for increasing the price ofgold, regarding the means of payment as the only important function, which is
nothing but a fickle nominalistic logic which neglects the function of measuring the value of gold.

Therefore, this function of gold is the most essential for us. Now, weshall introduce the following various proposals from Dr. Horie's criterion ;1• Conservative reform-PerJacobsson plan, E M. Bernsteinplan. As(IS)criticizes(14) it as follow :for the Bernstein proposal, Professor R. Triflin
O The proposal is simply a half way reforming plan designed to correct
short term disequilibrium. It is therefore not only useless as a long-term solu-

tion of the question of international liquidity, but tends also to evade theessential point.

INTERNATIONAL LI9UIDITY CONTROVERSY IN JAPAN (1) 79@ The IMF in mobilizing funds from members, has to follow complicatedprocedures, such as entiring into individual negotiations and obtaining theapproval of the member's parliament upon the uncertain basis of its futurebalance of payments with the result that the IMF wouldn't in practice enjoy

much mobility. It is wiser to simplify the present. Agreement as a whole
and thereby avoid the trouble of individual amendments and periodical negotiatlons.

@ If the IMF were to issue debentures for general purposes, it would beplaced in an irrational situation of possessing a large amount of local currencies

which would not actually be used for international payment.

But, suggests that limits of borrowings from leading countries should be
as follows : $3 billion from the United States, $1.5 billion from Britain, and$3.5 billion collectively from Belgium, Canada, France, Italy, Japan, theNetherlands and West Germany, the total amounting to 8 billion.
The second part of the Bernstein plan concerns the promotion of positive
policies for lending which is the original function.

Then, Bernstein proposes the institution of a "Reserve Settlemen Account" to deal with international monetary circumctances. Although this pro-posal met some strong opposition from France. The Netherlands and Belgium,
it was nevertheless finally approved, in principle, and the Executive Directors

were requested to formulate a definite plan by the end of 1961. As thisdemonstrates, the current tendency is to achieve the desired objective by alooser interpretation of the provisions of the Agreement, and to alter theorganization as little as possible.

2. Progressive plan-Balogh Plan, Maxwell StamP PIan. MeadeScammell proposal.

(lb) (16)(17)
On Dr. Horie's analysis, the best means for solving the reserve problem isa mixed theory from the various proposals. On this topic Balogh recommends
an expansion of the conceptions of Bretton Woods. That is, the solution, forthe reasons mentioned above, should combine in one organic measure a " liqu-idity approach" (capacity for bringing about liquidity) and an "equilibrium

approach" (minimizing the need for liquidity). It would be suthcient toenlarge the functions of the "Fund" and "Bank" of the present Bretton
Woods Agreements and require them to cooperate with each other. Unfortunately, however, there have been no instances of these organizations having

cooperated to overcome those deficits in leading countries brought about by.
recesslons.
First of all, a reform of some of some of the basic principles of the IMF

MASAHIRO FUJITA

80

Agreement is necessary, giving it the character of a central bank, as follows :Initially, it is necessary to change the character of members' subscriptions be-cause, as the quotas under the present Agreement must be paid in gold to theextent of 25 per cent, this results in a decrease in the visible reserves of mem-bers. Even if astand-by-creditis granted, this does not result in an increasein their reserves. In short, there is a defect in the relations governing subscrip-

tions to the IMF, borrowings and repayments and the levels of the reserves of-the members concerned. Could not this defect be eliminated by the following
methods ?
(a) To treat that part of the quota which is payable in gold (gold tranche)
as part of the reserves of the member concerned. This is the first step.

(b) The second is to increase the gold tranche without additional gold
payments.
(c) And Iastly, to treat all deposits with the IMF as part of a member's
reserves.

Next, the international central bank mentioned above should not only
make ordinary loans, but should also effect positive open market operations so

as to add to Iiquidity. Detailed regulations would of course be necessary to

prevent the abuse of such powers. In order to make it easier for creditor
countries to accept this proposal ;(!) Voting power should be increased in step with increases in deposits. The
qualified majority should also be raised in keeping with the degree of liquidity

created, through which the raising of liquidity as a whole would naturally becontrolled (because a certain number of votes are required for this).

(D Furthermore, it would be better for loans by the central bank to be limited

by a formula of some kind (for example, by a certain ratio to the rate of
economic growth or to external payments).
Balogh further proposes that the IMF set up an " International Development Fund" which will allow it automatically to direct the increase in its
permanent credit balances toward long-term investments in less-advanced coutries, these investments havlng some connection with the economic activities orinactivities of advanced countries in order to reinforce the operations of thepresent World Bank. According to Dr. Horie, by so doing, the IMF could be
expected to become an International Central Bank in the real sense of the term,
and in addition the necessity to increase international liquidity would be les-sened. As the foregoing is a warm outline, a number of technical points havenot been elaborated. The first step involves the incorporation of the IMF's
gold tranche into member's oflicial reserves, an idea also to be found in theINTERNATIONAL LIQUIDITY CONTROVERSY IN JAPAN (1) 81
I?l}hite plan. It goes without saying that the present rule that drawing on thegold tranche is entirely automatic should be firmly established.

As a second step, this gold tranche, that can be freely drawn upon, shouldbe raised by members without additional gold payments. Increasing external
payment facilities with no backing of gold in this way could be accomplishedgradually.

So, we would like to omit the following Stamp plan and Meede-Scammel
proposal (contains F. A. Lutz Plan).
{18)
The fixed rate system is a kind of international control and it should not
be overlooked. All central banks, therefore, even if they have transferred toflexible or floating rates and possess stabilization funds, would have to agree
secretly, in order to be realistic, on the conditions for intervention in exchange

markets ; otherwise there would be competition between the various stabilization operations. Thus a system of fioating rates without international control

is an adventure without precedent, and today, when international politics are
so disturbed, it is impossible to think that this could succeed. Even if suchstabilization agreements were to be concluded and were somehow successfui,
they would only serve to correct short-term disequilibrium, and would neverconstitute a fundamental solution of the question of international liquidity
itself.

3. Fundamenttal reform-Trz]77n plan. The Trilfi7n plan is the mostfundamental plan, and shows the final situation of the international monetarysystem, so we, in this work, will not criticize in detail on account of thevarious Anti-Triflin proposals.

According to Dr. Horie, the first criticism of the Trtlfi7n Plan is theestimation of the shortage of international liquidity. Triflin made a simple,
arithmetical calculation of the amount of reserves required as against the total

value of world imports, and this invited criticism. This, however, was but his
own analysis designed to obtain a general view, and reached in full awarenessof the drawbacks of the quantity theory of money. Moreover, this method was
employed in 1958 by the IMF itself in its noted report on "international reserves and liquiditor". In the Trz:fi7n proposal, the increase of international
reserves has hitherto been financed (1) by an increase in the dollar and sterlingdebts of the countries concerned; (2) by the concentration of gold in theamounts of central banks;(3) by the change of gold parity: and (4) by salesof gold on the market by the Soviet Union. After the war, however, thegreater part of the reserves (two-thirds in the last ten years) has been financedby (1). The world has now reached the stage at which any increase in dollar

MASAHIRO FUJITA

82

and sterling balances is not possible. Unless attempts are made to eliminate

the built-in destabilizer which this represents, there may be permanent
instability.

Second, the creation of a new international currency, which is the main
object of the plan, ensures its conversion into gold, a feature which has arous-

ed adverse comment. As is known, the instability of the current key-currency
system cannot be removed immediately, for it depends upon the skill withwhich international credit is controlled, and if the creation of credit through a

new currency results in a surplus of liquidity, then confidence in the new cur-rency itself would be shaken and a general flight to gold would become apossibility. In reply to the O. Altman criticism, Triflin counters that his plancan never weaken the control of the flow of gold.

Lastly, Dr. Horie shows the Harroa plan, and regards this as anothermeasure of attaining international liquidity. The Harrodplan is too wellknown already as the raising of the price of gold.

As the result of the above-mentioned analysis, Dr. Horie shows his own
original conclusion as follows ;Whether a fundamental reform of the current system is necessary depends,
ofter all, upon the prospects for the future of international liquidity. If wethoroughly examine the subject of international means of payment, we shallfind that there are three facets. The first concerns liquidity;the second has to
do with the centre of international finance ; the third, which is related to theabove, regards the control of gold.

Firstly, the well-known Triflin opinion is based upon his pessimistic
judgement of the future, On the other hand, those who take the opposite
view ; the optimists, consider that it is possible to cope with the situation bystrengthening the key currencies, and that there is ample room for this. However, with regard to future liquidity,acareful examination must be made freeof all traces of careless optimism. The question of aid to emerging countries
must also be taken into consideration, for it is highly questionable whether
even the combined total strength of the key currencies will be suMcient to pro-

mote rapid growth in a balanced world economy. In other words, the speedof the economic growth of key countries must not be over-estimated. Moreover, in practice, the extent of such a currency in the future is doubtful.
Secondly, the question is limited to the nature of the international financial

centre. It is further contended that centres in the plural rather than in the

singular are to be preferred. The reason given for this, for example, byBernstein, is that if only one currency is used by all countries as a reserve,INTERNATIONAL LI9UIDITY CONTROVERSY IN JAPAN (1) 83
gold is the only means of flight from that currency, but if two currency, but if
two currencies are utilized for this purpose, then the flight from one is merely
a flight to the other. In consequence, the only problem is for these two centres

to take measures to strengthen each other. Such being the case, is it notnatural, in the light of past performances, for us to desire that there should be

only one genuine centre acting as a strong international organization ? Therefore, the centre must be strong and the only one.

Thirdly, the question of an international currency system must be considered in the llght of the need to control gold, because it is impossible todisregard the existence of gold as a basic medium for international settlement.

In brief, we should not neglect the control of currency internationally, any

more than we should nationally. And any international control of currency
should, in practice, be through an international organization. If we ponder
over the questions of liquidity, control of gold and the character of an inter-national financial centre which underlie the international currency system, wecannot but feel the keen necessity of a fundamental reform of the current IMF

system, not only for a short term but also for a long-term benefit of theinternational monetary organization.
But if there is no such possibility and the separate international currency

systems of the two groups remain, the question then will be how to combine
these two systems into a one global. These theories of Dr. Horie may be themost popular acceptable opinion, and it may also in other words, reflect natural-ly our international position as being on the familiared Anglo-American side.

IV
Professor Kiyozo Miyata proposed the Gradual Increase ofthe Price ofGold by 2% from year to year until 1964.
Dr. Miyata points out the solution for the present international liquidity
dithculties as follows :The most effective remedy for the shortage of international liquidity is theincrease of the world gold reserves. This can be effected by three different,
but not necessarily mutually exclusive, approaches ;(a) to increase the world gold production,(b) to increase the ratio of gold used for monetary reserve purposes toannual production as well as to the total stock of gold-i. e., the diminution ofgold hoarding-and (c) to increase the price of gold-i. e., an upward revaluation of gold.

According to Professor Miyata, the problem of the so-called shortage ofee

MASAHIRO FUJITA

international liquidity has, broadly speaking, two different aspects. One is theconsiderable shortage or the low level of gold liquidity at present, which has

resulted from the fact that the rates of the annual increase of gold reserves

through gold production has been small compared with those of the growth ofworld trade over the past several decades. The other, and more important,aspect of the problem is the prospective gradual decline of the ratio of world
gold reserves to world trade in the future.

The first proposal below is concerned with the former aspect of the
problem, and the second is concerned with the latter. The Miyata proposal
attempts to check speculative hoarding of gold and also to preclude the probable
trend of declining international liquidity due to a shortage of gold production
relative to a growth of world trade in the future.

The governments should announce in advarice that the othcial selling andbuying prices of gold be raised periodically at regular intervals, and should
specify the dates of such revaluations and the size in percentages.

The size of the increase of gold price should not be more than the cost of
hoarding gold, which includes the costs necessary to exchange currency to andfrom gold. Suppose that the price of gold is raised periodically at the annual

rate of 2%. It could be raised by 2% ayear in one step, in two steps or infour steps.

The rate at which the price of gold is increased must be determined withdue consideration to monetary authorities' handling charges on sales andpurchases of gold.

The annual rate of revaluation of gold should be reasonably low-Iow
enough to discourage speculators from borrowing money on interest to hoard
gold for profitable sales at later dates. A raise of 2% a year is recommended
here.

The effects of the Miyata proposal result in the following four points :When a 2% a year successive revaluation of gold is carried out without
being accompanied by the above-mentioned once-for-all major revaluation ofgold, it would produce the following effects :1. The speculators who have purchased gold in hopes that the price ofgold would be raised by a substantial margin in the near future would be disappointed and sell their hoarded gold.

2. Asadirect effect of such a successive minor revaluation, the dollar
value of world gold reserves would be increased from $41,430 million to$42,258 million by 2% after the first gold revaluation, and the ratio of gold
reserves to world trade (value) would increase slightly from 31.5% to 32.1%.

INTERNATIONAL LIQUIDITY CONTROVERSY IN JAPAN (1) 85
3. If the price elasticity of gold production is assumed to be O.5%, thevolume of annual gold production would increase by 1%, and its dollar pricewould increase by 2%. As a result of both sides the dollar price of the annual

gold production would increase by 3.02% from $1,304 million to $1,343 million. If 60% of the annual gold production goes into the monetary reserves,
it would contribute to the growth of world gold reserves by raising its annual

growth rate from 1.89% to 2.13%.
4. Through these two effects, thus, the world gold reserves would increase at the annual rate of 4.13% ( ==2%+2.13%) which is more than double
as compared with the current rate of 1.89%. Such an estimated growth rateof the world gold reserves would quite equal is the estimated growth rate ofworld trade in the future.

Moreover, when the 2% a year successive minor revaluation of gold iscarried out together with the 42.85% once-for-all major revaluation of gold,
the effects would be as fol!ows : the world gold reserves would be raised from

$41,430 million to $60,368 million and the ratio of the gold reserves to theworld trade would be increased by 14%, and annual growth rate of gold
reserves would be much more than 4.31%.
Thus, the Miyata plan has a different and remarkable feature from theHarrodplan and Machlup plan. However, we do not understand the Miyata
Plan completely. For instance, we wonder as to the reason why the conceptionof international liquidity and an adequate growth of the international gold
liquidity in the future are original.

Furthermore, the plan to revaluate gold periodically in succession by 2%a year is recommended here as a measure to make up for a possible declining
trend of international liquidity in the future. Nevertheless, the function of themeasure of the value of gold must be recognized again.

As we agree with the idea that the ultimate direction for the developmentof the international monetary system will be found in strengthening the inter-national management of the reserves and facilities gradually we support the
proposal by the Gromp of Ten and the Hague Conference of 1966, and encourage along this line, any constructive opinions of all circles concerned.

In short, we support mostly the Matsumura proposal.

FOOT-NOTE:( 1 ) Robert TriMn, Gold and the Dollar Crisis, 1960.

(2) Zentaro Matsumura, An Evolutionary Plan for World Monetary Reform, The Banker,
Sept. 1966.
( 3 ) Shigeo Horie, The International Monetary Fund, retrospect and prospect, 1964.
( 4 ) Kiyozo Miyata, A Proposal to Increase the Price of Gold, Banking (Osaka), No. 176, 1962.

MASAHIRO FUJITA

86(5) Kivoshi Kojima, A Proposal for Increasing International Liquidity, Oriental Economist,(Tokyo), 32, pp. 549-51, Aug. 1964.

, A Revision of the Kojima plan for untying aid, Oriental Economist (Tokyo), 32,
p. 675, Oct. 1964.

(6) Japan Economic Research Institute, Proposals on the Subject of International Liquidity,
1964.

(7) Jhon H. Williarns, Postwar Monetary Plans and other Essays, 1947.
(8) A. C. Day, Reforming the International Monetary System, WTestminster Banle Reviexv,
Aug. 1964,pp. 2-12.

(9) Rinaldo Ossola, On the Creation of New Reserve Assets: the Report of the Study Groupof Ten, Banca Nationale del Lavoro, Quarterly Review, (Rome), Sept. 1965.
(10)

Jacque Rueff, Un Danger pour L'Occident: Le Gold-Exchange Standard, Le Monde,
juin, 1961.

(11) Michael A. Heilperin, The Case for Going Back to Gold, ,the Fortune, Sept., 1962.
(12) Sir Roy Harrod, the Dollar Problem and the Gold Question (the Dollar in Crisis, ed. S.
E. Harris), 1961.

, Reforming the World Money, 1966.
(13) Per Jacobsson, The Two Functions of an International Monetary Standard: Stabiljty

and Liquidity (World Monetary Reform, ed. Grubel), 1963.
(14) E. M. Bernstein, The Linking of Gold and Foreign Exchange as Monetary Reserves, 1963.

, Pltine fUr eine Reform des Internationalen Wtihrungsfonds (Wirtsehaftsberichte
der Creditanstalt Bankverein, Vienna, 13, Jahrg, Sept. 1961).
(15) T. Balogh, International Reserves and Liquidity, Economic Joecrnal, June, 1960.
(16)

Maxwell Stamp, the Stamp plan-1962version, Moorgate and IVall Street (London),Autumn 1962.
, the Reform of international monetary system, Moorgate and I)Vall Street (London),Summer 1965.
(17)

J. E. Meade, The International monetary mechani$m, Three Bank Review, No. 63, Sept.
1964.

(18)

F. A. Lutz, the Probelmof International Liquidity and Multiple-Currency and Standard,
Essays in International Finance, No. 41, 1963.

, Die Diskussion ttber die internationale Wtihrungsordnung, in Ordo, Jahrbuch fttr
die Ordnung von Wirtschaft und Gesellschaft, 1965.

87

INVESTMENT CRITERION FOR MAXIMIZINGTHE RATE OF CAPITAL ACCUMULATION
Hikoji KATANO

1. Professor P. C. Mahalanobis [1, 2] has developed his income growththeory for India's Second Five-Year Plan. At the same time, Professor E. D.

Domar [1] has independently developed the same kind of income growththeory on a line developed by Russian economist, Mr. Fel'doman. We callthis line of theory the investment priority theory to the capital goods industry.

This is a rather long title for a theorem. However, it shows quite clearly thecharacteristics of this theorem-that the larger the investment allocation ratio

to the capital goods industry the larger the growth rate of national income,
especially in the Iong-run. This theory is very attractive and suggestive for theplanning authority of a developing country. But the most important problem
for theplanning authority is how to fix the allocation ratio. Professor Mahala-nobis did not suggest any theoretical criterion. At the Second Internationa!

Conference on Operational Research, he and Professor M. Mukherjee [3] reported that the allocation ratio has rather operational characteristics. They
also said that this means that the allocation ratio depends on the planning
authority's choice; that the allocation ratio is fixed at a certain level to befeasible under a given condition. However, such a consideration is rather of
the actual application. Theoretically, we must take some investment criterion
to fix the allocation ratio at an optimal level.

2. Professor Domar has suggested a few criteria to fix the allocation ratio.
For the purpose, he assumes a limited planning horizon, for example of 10 or
15 years. His criterion is to fix the allocation ratio so as to maximize theaccumulated amount of consumption within this limited time horizon or to
maximize the consumption level for the last year of planning.

3. Professor M. Dobb[1] has recently pointed out that the choice of an
allocation ratio, in the framework of the Mahalanobis-Domar model, is closely
related to the level of the real wage rate. In this model, production coethcientsare all fixed. Due to this assumption, the 1arger the investment allocation ratio

to capital goods industry, the smaller the real wage rate. This means that theallocation ratio can be increased only by a sacrifice in the real wage rate.

However, the planning authority cannot force the reduction of the real wage

HIKOJI KATANO

88

rate so much under the present situation of a developing country. Thus Professor Dobb says that the allocation ratio must be chosen within a very limited
reglon.

4. In this paper, let us introduce an assumption of variable production coethci-

ents. This assumption makes the allocation ratio variable for a constant levelof the real wage rate. But, in this case, we have to note that a change in thetechnical level is accompanied by change in the allocation ratio. In addition
to this, we can observe the possibility of keeping the allocation ratio so as tomaximize the rate of capital accumulation.

5. Two industries are assumed in our proposed model;a capital goods industry (industry 1) and a consumption goods industry (industry 2). Each
product is produced by a certain input-combination of capital and labour.

Both industries have their own capital stocks which have be.en accumulated in the past. Each industry makes use of the capital stock so as to maximize

its rate of return of capital. This means that the employment level in eachindustry is determined by the level of capital stock. There is no guarantee forfull employment in the economy as a whole. Employment is measured interms of labour-hour, not in the number of workers. And we assume that aworker does not always work acco'rding to the standard working hour but byless than that. In this way, we can introduce a disguised uneinployment into
our model. Income to capital is fully saved for new investments, and income
to labour is spent only for consumption. Foreign trade is not considered.

'6. We assume our production function in a homogeneous form of the first
degree. Moreover, we follow it in the form of the Cobb-Douglas function.
Our model becomes as follows :Xl = K,cr Lll-cr

X2= K,P L,1-P}

production function

ri= aKta-iLii-aPr2= PK,PmlL,1-B
optimal utilization of capital

R ==p(1-a)Kia Li-cr

R - (1-P)K,P L2-P

K = K,+K,)

allocotion of capital stock

L = L,+L,)

employment

Xi = riKi+r2K2)

mvestment-savlng

FOR MAXIMIZINGINVESTMENT CRITERIONTHE RATE OF CAPITALACCUMULATION
where
Xi = output level in industry i,
Ki = capital stock allocated to industry i,

Li = labour hour employed in industry i,
ri == rate of return of capital in industry i,p == price of capital goods measured by consumption goods,
R = real wage rate per one unit of labour hour in termsof consumption goods,
K == total stock of capital,

L = total employment measured by labour hour,
ct and P pararneters.
For simplicity, we can revise the above model as follows :(2)

xl =klax2 =k2P(3)

ri =akia-i(4)

pr2 == pk,P-1

(5)
(6)
(7)
(8)
(9)

R ==p(1-a)k,a(10)

L = L, + L,

(11)

xiLi= riKi + r2K2

(1)

where

R - (1-P)k,P
L,k, =K,
L,k, = K,

K = K, + K,

xi -Xi /Li (i =:= 1, 2).

7. In this system, we can uniquely determine [xi, x2, ki, k2, Li, L2, L, K,
ri, r2, p] for given [Ki, K2, R].

Out of all these unknowns, we partly determine the following :(12) k,-=[ 2((11--P7,] ][ IBp ]-pi-(i3) k2= [,-Rp ]}(i4) r,-.[t?•8iP.9,)-]a-'[--,-R,-.-]-aE!

89

90 HIKOJI KATANO
a-1
a-1(is) r2=-a[2.(,l--X][Z'['i--P7,l][iEp]P(i6) p=-[1[l--21 ]a[,R-.]['fiP]Swhere 7L= K,K+i K2 :the capital allocation ratio toacapital goodsindustry.
Other unknowns are easily reduced from these results.
8. Rate of capital accumulation in each industry is(i7) gi--AKIii --S212K -KK-, -digx'(18) g2== dKK,2 -(1-ft)dK KK, -(1-ip)g(1-),)-i
where
to = dKe+Ki K2 : lnhdeuisntvryt?tment allocation ratio to a capital goods

AK,+AK,: rate of capital accumulation of the economy as
g=" Ki+K2
awhole.
As we have assumed that the full amount of income to capital is saved for
new investments, g must be equal to an average rate of return of capital, f,
which is defined as(lg) i== riKKi++rrt52 -7,ri+(1-2.)r2

And we can havea-1(2o) i-H7,(-12.7, )

where
a-1
a-1
H=( iiP) ( ,R-,)p
We can prove that the average rate of return of capital can be maximized

for 2=a(21) -r2... =i*=max. [i]Thus we can also say that the rate of capital accumulation is maximized

for N =a. According to the characteristics of the Cobb-Douglas production
function, a means the income distribution ratio to capital in a capital goods
industry. Thus it follows that if the stock allocation ratio X is equal to theincome distribution ratio to capital in a capital goods industry ct, the rate ofcapital accumulation is maximized.

INVESTMENT CRITERIONFOR MAXIMIZINGTHE RATE OF CAPITALACCUMULATION
9. According to (20), (17) and (18) become as follows:(22) g, = HÅë( ll' N )a-1

(23) g, -H(1-Åë)( ll'z )aThus we have the following relations(24) . Ki (t+1)=(1+gi) Ki(t)(25) K2 (t+1) -= (1 + g2) K2(t)From either of these relations, we can have(26) 2(,+1)= 1+Åë[ ll()t)(t) ]a'II .x(t)
1+X(t)[

]a-h

x(t)

1-X(t)X (t+1)

1 ------d-------t--------

'

;
:
:

y
1
1

1
1

l
1
1
t

1

t
1
1

o

y

:
;
:
:
:
:
:
:

t

)L (t)

Analysing the characteristics of this relation, we can get the following
.
pomts
:
1) time path R(t) steadily converges to Åë,

lim 2(t) = ip,th-,Foo2) if we can take Åë=ct, time path Z(t) steadily coverges to a,3) as we have already $hown that the rate of capital accumulation can be

maximized for 2==a, if we can take Åë==r-a, this economy steadily
approaches the optimal situation.
10. These results show that there exists only one optimal investment allocation ratio to the capita! goods industry. This optimal ratio is independent of
the planning horizon, but depends on a given technological situation.

91

92

HIKOJI KATANOREFERENCES.
Dobb, M., [1], An Essay on Economic Growth and Planning, London, 1960.
Domar, E. D., [1], Essays in the Theory of Economic Groxvth, Oxford, 1957.

Mahalanobis, P. C., [1], Some Observations on the Process of Growth of
National Income, Sankhya, 1953, 12, Part 4.
Mahalanobis, P. C., [2], The Approach of Operational Research to Planningin India, Sankhyb, Dec. 1955, 16, Parts 1 and 2.

Mahalanobis, P. C. and M. Mukherjee, [3], Operational Research Models used

for Planning in India, contained in The Proceeding of the Second
International Conference on OPerational Research, 1961.

93

PECULIARITIES OF MARITIME LABOR-with special reference to the supply of maritime labor-

Hiromasa YAMAMOTO

The life and working conditions of seamen are in many ways different
from those of workers on land. When they are on board ship, a ship is not
only their place of work but the place where they have to spend almost all of

their off-duty hours. During voyages they have to forego enjoying home lifeand various kinds of social activities on land. In addition the actual working
hours on sea are fifty-six hours a week for watch standers, though their workon Sundays and holidays are compensated for with overtime rates. Technological development of ship construction and also of navigation have removed
most of the perils of the sea, but still seafaring is one of the dangerous occupa-

tions. These characteristics peculiar to the working conditions of maritime
labor are disadvantageous to seamen.

In recent years workers on land have gained shorter hours of work andimprovement in real income, which has enabled them to enjoy their leisurehours in and out of their homes. Under these social circumstances it seems
probable thataseaman tends to dream of home life, and that in contrast he
will get a distaste for maritime labor because of the peculiarities of working
conditions. Job-seekers would gradually less prefer to go to sea because of thesame reason. These changes in the taste of working conditions of maritime
labor would tend to lead to higher wages for seamen in comparison with theseof workers on land. The writer intends to follow the trend of labor supply in

the Japanese shipping industry and to examine the validity of the abovementioned hypothesis in the case of Japanese seamen.(i)L Peculiarities of Maritime Labor and Labor Sapplor
Statistics of the job exchange service for seamen show that in the last ten
years the ratio of supply of maritime labor against demand has been gradually
decreasing. Especially is this true in the case of unlicensed seamen where thelabor market has shown a different phase from the usual since 1960 ; the volume(1) A similar attempt with regard to seamen of the United States is found in the following

article: L. A. Rapping, "The Subsidy and Labor Cost" in Ferguson and others, The
Economic Value of the United States Merchant Marine, 1961.

HIROMASAYAMAMOTO

94

of demand surpassing that of supply. (Table 1.)

If we compare the two periods, that is, 1956 to 58, and 1962 to 63, withregard to the labor movement of seamen, in the latter period the flow-out oflabor as compared with the flow-in increased considerably, and also the flow-outof active labor force which consisted of age groups under thirty years of age

becameclearer. (Table2.)
In addition, in recent years, at entrance examinations of mercantile marine

colleges and other vocational training schools for seamen the number ofapplicants and also the ratio of the number against that of persons to be
admitted has gradually decreased.
It has also been pointed out that in the last several years a considerable

number of mercantile marine college graduates entered into services on land
other than shipping, though they could have easily found posts in shipping
companies.(2) The above-mentioned facts appear to be symptoms that seafaring
has become less attractive to young people and also to the seafarers themselves.
Other available surveys also suggest that seafarers find their jobs less attrac-

Table 1. Job Exchange Service for Seamen

A. LicensedOthcers
Date

Jobs offered (A)ThoseNo. of applicants

newly employed(B)

B Å~ 100

A

1954

7,466

3, 9293, 748

189,7

1956

7,853

5,718

4,925

137,3

1958

7, 993

5,244

4, 560

152,3

1960

8, 424

8,624

6, 171

102,4

1962

10,959
1O,684

11,5337, 16595,1

9, 284

6,353

115,1

1964

B., Unlicense d Seameni

Date

Jobs offered (A)No. of applicants

Those

newly employed(B)B Å~100

A

1954

15,091

9,483

8,868

159,1

1956

15,304

11, 194

10,033

136,6

1958

14, 948

9,992

149,6

1960

14, 248

15,606

8,942
11,0891962

17,97321,651

13, 4071964

15,49917,972

10,783

91,3
83,O
86,3

Source: Ministry of Transportation, Seamen's Labor Survey(2) H. Yamamoto, "On Industrial Relations in Japan's Shipping Industry"
and Business Review, No. 10. p. 58.

Kobe Economic

PECULIARITIES OF MARITIME LABOR

95

Table 2. Labor Movement of Seamen
A. LicensedOflicers

1

No. of newly hired employees

New entrants
Experienced

l

1956

1957

1958

1962

1963

3,713

3,452

3,151

1,536

2,578
1,051

3,125

1,787
1, 926

1,916

1,427

2,070

1,812

2,200

2,604

3, 7344, 205

585

679

1,051

1,302

1,615

l,925

2,683

2,903

25
575
669
346

49
599
767
510

28
1,035

33
989

1,O06

1,086

614

795

1,055

E

No. of separated employees
Those moved to other shipping

521

firms
Retired and those left shipping

industry

1,291

19 year or less

16
508
547
221

20-29 years
30•-49 years
50 years or more

1

F

i

,

B. UnlicensedSeamen
1

1956

1957

1958

1962

1963

No. of newly hired employees

8,111

8,053

10,4594, 6724, 416

5,458
3,074

8,412

New, entrants

3,439

3,637

2,384

4, 814

4,190

4,751

5,606

8,O17

10,918

1,181

1,190

1,626

2,680

3,827

3,O09

3,561

3,980

5,337

7,092
1,348

Experienced
No. of separated employees
Those moved to other shipping

firms
Retired and those left shipping

industryF3, 59819 years or less

503

541

578

1,O17

20--29 years

1, 695

1,955

1,746

2,650

3,478

30-49 years

589
222

798
267

1,034

1,100

1,660

622

501

606

50 years or more

Source: Ministry of Transportation, Seamen's Labor Survey.

tive. When the personalities of workers in different industries were examined,
the personalities of seamen were on the average the most inactive in compari-son with other industrial workers. The research also showed the low moraleof Japanese seamen in general.(3)In 1956, research members of Tokyo Mercantile Marine College did an
opinion research of seamen as to how they felt about their jobs. According to(3) Bureau of Seamen, Ministry of Transportation, "Kaijo Rodo Chosa Hokoku" (Research
Report on Maritime Labor) No. 11.

HIROMASA YAMAMOTO

96

the result of the survey those who wanted to continue their work amounted toonly abouta third of the total answers. According to another opinion research
enforced in 1955, in case of workers engaged in various fields of occupations

the percentage of those who were satisfied with their occupations was on
average 55 percent.{`) If we compare these two figures, it is clear that seamen
were less satisfied with their occupation than other workers. According to theformer survey, their dissatisfactions were based on the following reasons.

1. A seaman has little chance to enjoy home life.
2. There are few securities for old age after retirement.

3. 0n board ship it is didicult for seaman to enjoy private life even during
off-duty hours.
4. The future of his life as a seaman is not promising.
5. A seaman is restricted in the variety of recreation or participation in socialand cultural activities.

6. A seaman is provided with fewer holidays than workers on land.

7. The wage and pay of a seaman do not match the work.
8. Duties on board ship often lead to overwork.
9. His occupation as a seaman is not properly appreciated by the public.
10. He feels uneasiness concerning his children's education.

Many of the reasons in which seamen found their occupation undesirable
were related to the peculiarities of their working conditions, while complaints
about their wages ranked seventh. But it does not necessarily mean that in any

decision as to whether they would remain in their jobs or leave for land theywould attach more importance to working conditions. Generally speaking,when a worker selects his job or employer, he gives much thought to wages
and fringe benefits as well as to other working conditions. From this context,
it might be said that the seaman who pointed out the peculiarities of maritime
Iabor as the reason of his dissatisfaction to his occupation also felt that he wasunduely being paid lower wages for what he had to sacrifice by being on board

ship. In other words, if he could receive a wage which he could regard as
being suficient compensation for his sacrifice, he would be less dissatisfied withhis life on board ship.

The survey of opinion research for seamen in 1956 was the'first attemptof this kind, so there has been no data to compare it with. Consequently, it is

impossible to ascertain how the opinion of seamen to their occupation haschanged in the historical trend during in which the level of living has general-ly improved, or whether more seamen have become satisfied with their wages(4) T. Nishibe, Nippon no Sen-in (Japanese Seamen) 1961. p. 126.

PECULIARITIES OF MARITIME LABOR

97

and working conditions from the results of the survey of 1956. However, it
does appear to be true that as the level of living has generally improved, seafarers have tended to be more conscious of the peculiarities of maritime labor
as serious handicaps of their occupation. If we recall the history of the labor

movement concerning shorter hours of work, it is generally admitted that with

the improvement in the level of income the laborer tends to attach more importance to shorter hours of work and more leisure time in comparison withthe wage earned. In Japan after World War II wages and the level of livingof workers have improved. In company with this many of the trade unions in
manufacturing and other industries on land began to obtain shorter hours ofwork by collective bargaining, and some of the large companies have been
giving their employees two holidays a week. In addition, the word "leisuretime " has become popular with the public in the last ten years. Trade unions,management, and also journalism have given greater attention to shorter working hours, paid vacations, recreation, and the spending of leisure time. It may
be quite natural that seamen have gradually tended to consider the peculiarities

of maritime labor as a serious handicap of their occupation and to demandhigher wages than before as compensation for their working condition in
an atmosphere where people have begun to make much of leisure time. In
other words, as the general level of real income has improved, seamen desire
higher wages as compared with other occupations of comparable skill.
If we compare the changes in monthly earnings of unlicensed seamen andmanufacturing workers of the last six years, the monthly earnings of the former

show a more rapid increase than that of the latter. (Table 3). It appears tobe proof of the above-mentioned hypothesis. But, in order to examine its
validity, it is necessary to give a brief survey of the Iabor market of theTable 3. Monthly Earnings of Unlicensed Seamen and
Manufacturing Workers

f

l

L

Cash earnings (Yen)

Seamen

l

f

t
/

:

1960

25,172

1961

28,325

1962

31,6301963

l34, 9361964

1

39,795

1965`

43, 574

L[!

Index of real income

Manufactur{ftg

Manufacturing

Seamen22,983

100.0

100.0

24,719106. 9I02.1

26,930

111.7

104.2

29, 559114.7

106. 332,533125. 9112.7

35,803

127.8

115.1

workers

Note : 1. covers searnen on board steamers.
Source: Seamen's Labor Survey, No. 32., p. 6.

workers

HIROMASA YAMAMOTO

98

Japanese shipping industry.

II Structure ofthe labor market o{seamen
Job organization on board ship is composed of the deck, engine, radio,
and steward departments. Seamen are classified as licensed othcers and un-

licensed seamen. Deck and engine-room departments are composed of bothothcers and seamen, while the steward department is composed of seamen incontrast with the radio department which is made up of officers. In order tobe qualified as a licensed oflicer a man has to pass the examination given by
the ministry of transportation after he has either finished the course of a mer-cantile marine-college or high school, or has experienced three years' work as

a seaman. There is no legal qualification for unlicensed seamen with the
exception of the age restriction. National organizations for seamen's training

courses provide boys of sixteen years old and over with the necessary knowle-

dge and training needed for seamen for a year. Those who want to beunlicensed seamen either take the seamen's training course or go to sea im-mediately after they have finished middle school. Seamen are promoted toupper grade jobs with the increase of their years of experience. In Japan
there is a system for a seaman to be promoted to an odicer if he is qualified forthe position. But in most cases oflicers of ocean-going vessels have finished amercantile marine-college or high school, while most oflicers of coastal vessels

have been promoted from seamen.
How is the ease of labor movement to and from the shipping industry?
Can we find similar jobs to that of seamen in other industries than shipping?
In the fishing industry we can find several kinds of similar jobs, but there arevery few shore-industries where we can find similar jobs to shipping, resulting

in the dithculty of movement for seamen to other industries. All jobs of thedeck department are peculiar which can be found only in the shipping industry.
Therefore it is quite difficult for deck oflicers and men to find suitable jobs inshore industries. For engine-room and radio ofllcers and men the flow-out
from the shipping industry is not as diMcult as that of the deck department,
but the flow-in to jobs in the engine-room and radio departments from shore
industries are restricted because ofllcers of the engine-room and radio departments must be qualified with a national license which is different from that ofshore industries. Jobs in the steward department such as cooks, bakers, andstewards are to be found on shore. In short seamen find difliculties in changing

theirjobs to shore industries, though those of the steward department seem tobe an exception, while the fiow-in of labor force into shipping is also restricted

PECULIARITIESOF MARITIME LABOR

99

by legal restrictions and the needed skill. In the shipping industry the supplyof labor is inelastic relative to the change of demand.
In the next step it is necessary to point out the institutional characteristicsof the labor market of the Japanese shipping industry. In 1963 the total

number of merchant seamen who were employed amounted to 98,823. Amongthem about eighty per cent on board merchant steamers were organized into
the All Japan Seamen's Union, which included both oflicers and unlicensed
seamen, while seamen on board sailing ships with engine were not unionizedwith a few exceptions.(i)(2) The seamen's union concludes union shop agree-ments with shipping companies. Though organizations of shipping companies
for collective bargaining reorganized several times during the last twenty
years, if we pay attention to the pattern of their collective bargaining and thecontents of trade agreements, steamship companies may be classified into thefollowing three groups;the group composed of companies engaging in oceantransportation, the group of companies engaging in mainly near-sea trade andalso shipowners whose ships are chartered by the companies belonging to thefirst group, and the group of small shipowners engaging in coastal trade withsteamers under 1,OOO gross tons.
Table 4.

Number of Merchant Seamen employed
Merchant fleet

Steamer

Sailing ships with engine

Total

1946

56,517

81,409137,926

1948

53, Otl8

76,087

129, 135

1950

44, 330

42,42586,755

1952

49,23739,38788,624

1954

47, 782

37, 32185,101

1956

52,732

34,89187, 623

1958

63,73726, 396

90,133

1960

70,89675,O0525, 843

96,73923,81898, 823

1963
Note ;

Statistics covers seamen to whom the Seamen's Law applies. Consequently
seamen on board 1) ships of five gross tons or less, 2) ships engaging in
inland water transportation, are excluded.

Source :(1)(2)

The Ministry of Transpotation, Seamen's Labor Survey.

All Japan Seamen's Union, Katsudo Hokokusho (Annual Report), 1963, p. 12.
A few comments are necessary for sailing ships with engines. Though statistics show
this category of ships made of wood as sailing ships, a large number of them lack sails
completely and even in the case of ships providing sails their main propulsion power isbased on engines. The size of these ships range mainly from twenty to three hundredgross tons.

1oo HIROMASA YAMAMOTO
Among the three groups there are large wage differentials, though hours

of work and other working conditions are nearly standardined. In addition,
between the seamen on board sailing ships and those on steamers there are larger
wage differentials, and in 1961 the monthly earnings of the former were 1ess thanhalf the latter. (Table 5) Such large wage differentials among shipping com-

Table 5. Wage Differentials among Shipping Firms
A. Searnen on board steamers, as of June 1961 (1)Unliceased SeamenMonthly earning

Licensed oMcers
Group of firms

AgeMonthly eaming(yen) 2Age(yen) 2

Ocean-going ship operators

34,5

58,47531, 734,as9Coasta1 ship dperators

37, 7

45, co7

31,2

25,485Note:

1. Table covers seamen employed by members of JSA.
Z Monthly cash earnings when on board ship.

Source :Senshu•dantai Kyogikai.

B.

Searnen on board steamers and those on board sailing ship
as of July 1961
Licensed othcers

Age

Monthly earning(yen)

Unlicensed seamen

AgeMonthly eaming(yen)

Steamers

ss,7

57, 79729,1

33, 889

Sailing ships with engine

sa, 827,89829,916, 647

Source : Seamen's Labor Survey, Extra Issue of July 1961.

panies were due to the difference of productivity of labor on the one hand, butthey reflected the differences of personnel management arnong shipping com-panies, on the other hand. The largest shipping companies selected theiremployees from new graduates and trainees from mercantile marine colleges
and training schools, and encouraged their continuous service by means of
longevity pay and promotion. They seldom hire(1 searnen who had worked
under other employers. Shipping companies which engage in ocean transportation adopted more or less a simi1ar personnel management. Consequently

seamen who were employed by foreign-going ship operators seldom changed
their employer. In contrast seamen on board coasta1 steamers and sailing ships

often changed employers. (Table 6)

PECULIARITIES OF MARITIME LABOR

101

Table6. ContinuousEmploymentofSeamenEmployedby Main Shipping Firms `i)(as of June, 1960)

A. LicensedOMcers
Total

(A)

Those ever

employed by otherfirms (B)

BIA(%)

Average yearsof continuous

employment

Total

15,2715, 326ss

7.8

Ocean-going ship operators

13, 383

4,092

31

8.1

Caastal ship operators

1,888

1.234

65

5.4

BIA

Average years

B. UnlicensedSearnen
Total

Those ever(A)

employed by otherfirrns (B)Total

33,487

9, 747pm

8.0

Ocean-going ship operators

29,3097, 727as

8.5

Coastal ship operators

4,169

2,020

ns

4.8

(%)

of continuous

employment

Note: 1. Statistics relate to seamen employed by members of the Japan Shipowners'

Association. 'Source: Senshu-dantaiKyogikai(AssociatedCommitteeofShipownersforCollective

Bargaining).

According to the research of the Institute of Labor Science during theperiod of 1952 to 1957 the greater part of trainees of vocational courses for un-

licensed seamen come from rural areas, and trainees whose fathers engaged inagriculture or fishing amount to 47.8 per cent of the tota1. The same research

reveals that students of mercantile marine c'olleges come mainly from iarge
cities, and a considerable number of pupils of mercantile marine high sehoois

come from prefectures facing the Seto Inland Sea. The research did not coverseamen who go to sea without vocational education, but it is generally admitted

that they come from the rural areas of Chugoku, Shikoku and Kyushu
districts.(s)As we have pointed out, there were 1arge wage differentials among seamen
who were employed by different companies, and the earnings of seamen on
board sailing ships were lower than those of manufacturing workers. (refer toTables 3 and 6) Uunder these conditions we should carefully avoid reaching' T. Nishibe, op. cit., pp. 15-16. also refer to K. Yoshimura, Chosa Yoroku, 1940, pp. 125(3)46. .

HIROMASA YAMAMOTO

102

a conclusion on the validity of the hypothesis by means of a comparison of
average wages and earnings between seamen and other occupations, but attention should be paid to the lowest price of the labor supply to the shipping
industry.

III Peculiarities ofMaritime Labor and Seamen's Wages
Is it possible to prove the hypothesis that the change of taste of seamen to
the peculiarities of maritime labor leads to favorable wage differentials relative

to workers on land? The following reasons make it quite difficult to solve
this problem. In the first place, as important factors which influence the levelof wages in some industries we might point out the productivity of labor, thechange in the price of the product, the impact of trade unionism, the degree ofmonopoly in the product market, the change in the structure of the labor force

in an industry. It is dificult to measure the individual influence of thesefactors. As to more fundamental dithculties we are confronted with is the factthat the change of taste of seamen to the peculiarities of maritime labor does
not produce a wage increase directly, but it leads to a dwindling of the labor
supply at the present wage level, on the one hand, and it influences the amountof wage increase that the seamen's union demands in collective bargaining, on
the other hand. Therefore it is dithcult to separate the effect of the change oftaste upon wage with the impact of trade unionism.
In addition, a wage increase often resultsLin an ex post improvement of laborproductivity through the introduction of labor saving apparatuses. Consequent-

ly some part of a wage increase which can be explained by the improvementin productivity of labor is also due to the change of the taste of seamen to thepeculiarities of maritime labor.

However, in rough form it is possible to show statistically the mechanismof wage increases of seamen due to the change of their taste for the peculiarities of maritime labor.

In order to simplify the explanation, we will deal with the case of
unlicensed seamen. Table 7 shows the average monthly earnings of unlicensed seamen on board ships of various categories and sizes. It also shows
the change in ages and duration of service of unlicensed seamen on board ship.

The monthly earnings and age structure of seamen thus classified correspondroughly with those of seamen employed by respective groups of shipping firms
which engage in different trades and maintain collective bargaining separatelyfrom the seamen's union ; sailing ships with engines are operated by small
shipowners whose employees are in most cases not unionized, and respective

PECULIARITIES OF
MARITIME LABOR
Table 7.

103

Average Monthly Earnings and Years of Service of Seamenby ship categories on board ship (Unlicensed seamen)
1958

1961

1963

Age

26.0

29. 9

32.2

Years of service

7.0

9.4

11.1

(Yen)

10,724

16,64720.251

Age

27.2

27.4

28.0

/

Sailing ships withengmesMonthly earnings/

Under 500 G.T.

ua
ts

E
8

E}S

1 OOO G.T. and over,to Qnder 3 OOO G.T.

,

5,OOO G.T. and overYears of service

8.2

5.4

Z5

Monthly earnings(Yen)

15, 762

20,29224, 380

Age

29.0

28.7

29.4

Years of service

10. 2

9.2

10. 3

Monthlp earnings(Yen)

21,98529, 734

31,497

Age

29.1

30.2

31.2

Years of service

10.6

11.6

12.5

Monthly earnings(Yen)

29,871

39,52242,294:

Source : Ministry of Transportation, Seamen's Labor Survey, No. 5, No. 25 and Extra
Issue of July 1961.

classes of steamers correspond to the groups of shipping firms engaged incoastal trade, coastal and near-sea trade, and ocean transportation.

In considering the change in the average age structure of seamen during
this period, we find that seamen on board sailing ships are older by about six

years and their years of experience increase the same number of years while
seamen on board steamers of different sizes are two years older at the maximum. This fact indicates that in case of sailing ships there were few new en-trants and that the flow-out of seamen was covered by experienced seamen ofolder years, while in the case of steamers the turn-over of labor proceeded as

usual. During the same period the monthly earnings of searnen on board
sailing ships which were not influenced by the change in age structure or duration of service doubled,(') and ,showed the largest increase in ratio. As we have(1) The large shipping companies have adopted a wage system in which longevity pays
amount to a considerable part of the totaL Promotion to an upper grade is also basedon the duration of service in the same company. Therefore in the case of searnen employed by large shipping companies their earnings increase in proportion to the increasein their years of service and ages, even if they remain in the same posts. But in case of

seamen on board sailing ships their wages are determined as a rule according to theirjobs with no consideration given to age or duration of service.

104

HIROMASA YAMAMOTO

pointed out in the preceeding section, there were large wage differentials amongshipping companies according to the trade or the size of ships which thecompany operated, and seamen on board sailing ships were paid the lowest
wages and pay, Therefore, the wages of seamen on board sailling ships werethe lowest supply price of seamen's labor, and it doubled during the period of1958 to 1963.

Hereafter we shall concentrate our attention on the labor supply andearnings of seamen on board sailling ships. The few entrants among younger
seamen into the labor market of sailing ships was partly due to the shrinkage
in opportunities for employment (refer to Table 3), but it might also be due tothe unattractiveness of the job to possible applicants in comparison with otheravailable jobs. The districts from where most of seamen on board sailing ships

have come are, as we have pointed out, rural areas facing the Seto Inland Sea

and also those of Kyushu Island, and the occupations of their families aremainly small farmers and fishermen. The flow-out of labor from rural areas isneedless to say due to the differentials of earnings between industrial workers
and agricutural and fishing workers based on the differentials of their product-

ivity. Labor in rural areas flows out into large cities and also industries innearer districts. They choose the most favorable job opportunity, but when
they fail to get a desirable job opportunity due to the conditions of demand
they are forced to find the second-best job opportunities until they can get their

desired jobs. Those who fail to get jobs in large cities try to find job oppor-

tunities in near by districts where are unfavorable wage differentials as compared to large cities. Seamen on sailing ships are one of the job opportunities.

On the other hand, in the case of experienced seamen on board sailing ships
who desire to change their occupation and find work on land, the chance offinding job opportunities are severely restricted because not only are there few

working places on land for them to make best use of their experiences, but
because of the employment policy of large establishments in various fields ofindustries which as a rule hire new graduates from school, limiting employ-ment of those who have had experience of work under other employers. Consequently, they have to seek job opportunities as unskilled laborers, and in mostcases they are employed either by small firms as regular employees or by large
firms as day workers.

Table 8 shows the change in average monthly earnings in the last ten
years of seamen on board sailing ships and day workers. It also shows theaverage regional monthly earnings in ten prefectures from where the greaterpart of seamen on board sailing ships come. The regional monthly earnings

PECULIARITIES OF MARITIME LABOR

105

Table 8. Comparison of Monthly earnings of Unlicensed Seamen on board
sailing ships with engines and those of other occupations
1

Unlicensed seamen

Average Regional
earnings of particular

Extra-day.worker

districts 1)

2)

1955

9, eo5

16. 560

9, 225

1964

29, 193

31,32919,175

1955

1oo

169

pa

1964

1oo

107

66

Note: 1. Averageregional monthly earnings of regular employees in tenprefectures
where most unlicensed searnen have come from.
2. Calculated on the basis that day workers work twenty-five days a month.
Source: Ministry of Transportation, Seamen's Labor Survey. Ministry of Labor,

Monthly Labor Survey.
indicate the possible earnings which can be earned by most of those who newly

enter the labor market in those areas. The monthly earnings of day workers
indicate the earnings that experienced seamen would get on land. The tableshows clearly that on the one hand, earnings of seamen approach nearly thesame level as the regional monthly earnings, while on the other hand seamen
have gained favorable earning differentials against dayworkers. These relativechange in earnings, especially that of seamen, correspond with the change in

the age structure of seamen on board sailing ships as shown in Table 7. Inother words, their earnings were raised to a level that was necessary to securea crew for sailing ships, restraining their fiow out, though it was not highenough to introduce a flow-in of a younger labor force.

If we recall the fact that sailing ships are a margirial trade which aredestined to disappear due to their low productivity and the decrease in the
demand of such labor and that most of the seamen on board are not unionized,
and also that during the period of the economic growth of Japan a relatively
short supply of labor resulted in the whole economy, the relative change inearnings of seamen suggests that the change in the taste of the experienced
seamen for the peculiarities of maritime labor led to the rapid increase of theireammgs.
Due to the lack of statistics of wage rates and hours of work with regard

to seamen on board sailing ships and those of regions with which we are con-cerned, much can not be said about them. But according to the result of myinterview with seamen their hours of work on board sailing ships did notchange during the period. During the same period the average monthly tota1
hours of work in all industries and manufacturing industries in the whole
economy maintained nearly the same level, though monthly scheduled hours of

106

HIROMASA YAMAMOTO

work showed a decrease in case of large firms of manufacturing industries.{2)Therefore, if it is permitted to consider that the monthly hours of work of theregions with which we are concerned followed a similar trend as those of thewhole economy, it might be said that the wage rate of seamen on board sailingships had a similar change in monthly earnings relative to regional occupations.

The raise of wages of seamen on board sailing ships, which is the lowest
supply price of seamen's labor, seems to have had a favorable influence upon

the wages of seamen on board coastal steamers which would otherwise havebeen suppressed by the lower wages of the former which compete in the same
products market. In the next step the raising of wages of seamen on board
coastal steamers influenced the wages of those on board steamers engaged innear-sea trades which are in competition with the former because a considerable

number of coastal steamers and near-sea steamers may engage in both trades
interchangeably. In turn, the raise of the lowest supply price of seamen's labor

would lead to an overall raise of their wages in different categories. These
processes would result in larger and more favorable wage differentials for sea-

men as against workers on land.

Some important reservations should be placed on our explanation.
Though our consideration is confined to the labor market of seamen in the last
several years, the problem with which we are concerned should be treated aftera Iapse of a longer period if we take into consideration the inelasticity of thelabor supply of seamen. However some validity to this explanation rnight begiven because of our method of treating seamen on board sailing ships where
the demand of labor has been declining,(2) Yearbook of Labor Statistics, 1955, pp. 244-45 and p. 275, 1964, pp. 203-4.

107. BRASIL EN EL JAPONLOS ESTUDIOS DEL---Con Referencia a Ias Ciencias Sociales-

Yoshiaki NIsmMuKAI,
I. LA SITUACIONACTUAL DE LOS ESTUDIOS DEL BRASIL
Despu6s de la Guerra iMundial II, como sabemos, las situaciones mundiales•

han mudado su estructura notablemente y los problemas nuevos y importantes
se han producido en la politica y la economia. En el campo de la politica
internacional, "relaciones entre Este y Oeste" o sea las relaciones entre lospaises democraticos y los paises sociaiistas, se hace un problema importante, y,,en otra parte, en el campo de la econom{a internacional, los " problemas entre
Sur y Norte", o sea los problemas entre los paises desarrollados y los paises
sub-desarrollados tambi6n se hace importante.

Enfrontando con las nuevas condiciones del mundo, las ciencias sociales
deben preparar las nuevas armas te6ricas para resolverlas. Por ejemplo, en elcampo de las ciencias econ6micas, el estudio de la teoria del desarrollo econ6-

mico de los pafses sub-desarrollados ha aparecido como el campo nuevo. En elproceso de estudiar, se han reconocido la necesidad y la importancia del estudioy la investigaci6n de la politica, la economia, y la sociedad de estos paises, lo

que tambi6n se sabe en los otros campos de las ciencias sociales. En todos loscampos, la necesidad de los estudios extranjeros se hace urgente.

Pero, la necesidad de los estudios extranjeros ha surgido no s61o de la
demanda practica basada en la actualidad mundial despu6s de la Guerra, sinode la reconocimiento de la necesidad del entendimiento mutuo de los paises.
Desde la Guerra Mundial II, cada pais del mundo experienci6 Ia pobreza delconocimiento y el entendimiento sobre los otros paises. Por eso, es natural quecada pais haga el entendimiento mutuo mas profundo y promueva el intercambio
cultural.

Pues bien, desde este punto de vista, considerando la situaci6n actual delos estudios del Brasil en el Jap6n, no podemos menos de enfrontar la actualidad desdichada. Los estudios del Brasil en el Jap6n estan en el grado muy bajo.

El estrato de los especialistas desciplinados es delgado, las facilidades ylas organizaciones para estudiar son muy insuficientes, por eso, los frutos

de los estudio son escasas. De 1964 a 1965 (dos afios), los articulos
cientificos, los datos, los comentarios sobre la economia, la politica, y la socied-

108

YOSHIAKI NISHIMUKAI

ad publicados en el Jap6n suman a 17,758 en total, de los cuales los referidos ala Am6rica Latina ocupan 119, es decir O.66% y, sobre todo, los referidos al

Brasil, solamente 22, o sea O.12%. Obserbando solamente de los articulos
cientificos, la proporci6n disminuye mas ; los referidos a la Am6rica Latina, 51(O.31%), de los cuales, los al Brasil solamente 16 (O.09%). Es dificil confiar
esta cifra para los hombres quienes saben la historia larga entre el Jap6n y el
Brasil, pero desdichadamente es la realidad.

dPor que se quedan en el grado tan bajo los estudios del Brasil en el Jap6n?
Las causas principales son (1) la actitud tradicional de los estudios extranjeros
en el Jap6n y (2) la actitud de los cientificos sociales en el Jap6n.

Ante todo, vamos a reflexionar la historia de los estudios extranjeros en el

Jap6n. Desde la 6poca de Meiji, el fin tradicional de los estudios extranjeros

en el Jap6n era absorber la cultura de los paises desarrollados y promover su

modernizaci6n. Esta actitud japonesa pudiera ser inevitable porque el Jap6n
estaba notablemente atrasado a la corriente mundial por causa del aislamiento
largo y tenia la necesidad de absorber y introducir los conocimientos y las t6c-

nicas de los paises desarrollados. Siento mucho que en la actualidad, 100 anos
despu6s de la Restauraci6n de Meiji, se queda firme tal actitud. Aqui vuelvo acitar los mismos datos que los anteriores, De las tesis, los articulos, los come-.ntarios sobre las regiones extranjeras, los referidos a la Europa occidental
ocupan 44.3%, y los a Ia Am6rica del Norte, 19.7%, es decir, los relacionados
a los 11amados paises desarrollados ocupan 64% de todos. Los referidos a lasregiones sub-desarrolladas o en desarrollo, a excepci6n de la cifra de 20.3% delos a Asia que tiene relaciones intimas con el Jap6n, indican la proporci6n muy

baja; los a la Am6rica Latina, 4.4% y los a Africa, 3.8%. Como muestranestas proporciones, en el Jap6n es tradicional el pensamiento que los estudios
extranjeros quieren decir los estudios sobre los paises desarrollados.

Esta tradici6n introdujo la metodologia err6nea a los estudios extranjeros.

Se introdujeron al Jap6n las ciencias sociales desenvueltas en la moda deldiferencialismo cientifica en Europa en el siglo XIX. Por eso, en caso de que
el Jap6n entiende los paises extranjeros, tiende a estudiar los objetos solamente

desde el punto de vista especial. En Europa se heredan las civilizaciones clas-

icas de Crecia y de Roma, y se tiene la tradici6n cristiana como base comUn.

Por lo tanto, en Eupopa, cuando se estudiaron uno a otro, no era irracional
analizar directamente desde el punto de vista especial. Porque, en el an61isisde los fenomenos nacionales especiales habia posibilidades suficientes de encontrar el principio universal, y adem6s de las posibilidades habia el entendi-

miento mutuo que estaba basado en el clima cultural com6n. Por otra parte,LOS ESTUDIOS DEL BRASIL EN EL JAP6N
en el Jap6n con el clima cultural heterog6neo, se introdujo la misma metodologia que en Europa, lo que era ittil para absorber los conocimientos y las t6cnicas

por cada campo especial, pero no sirvi6 suficientemente para entender que son
Inglaterra, Francia y Alemania, es decir, la nacionalidad, la cultura, los sistemas

diversos de estos paises. Pero, no pudiera evitarlo en los estudios extranjeros
en el Jap6n que tienen el fin principal de absorber las culturas avanzadas.

Aqui aparece un problema importante. Es el problema de que Ios estudios
del Brasil en el Jap6n suceden el metodo tradicional. Como se sabe bien, lasrelaciones directas entre el Jap6n y el Brasil se han hecho intensas por mediode la emigraci6n. En el caso de la emigraci6n, seria importante entender el
Brasil como pais-recibidor de los japoneses mas bien que absorber la culturaavanzada. Al mismo tiempo, serian necesarios los esfuersos por hacer entendera los brasilenos que tal pais es el Jap6n y qu6 tales pueblos son los japoneses.
En este sentido, los estudios del Brasil en el Jap6n debian ser distintos de losestudios extranjeros tradicionales.

Sin embargo, en la preguerra, dominaba la corriente cientifica de que losestudios extranjeros significaban los de los paises desarrollados. Los especialis-tas disciplinados de las ciencias sociales creadas en la Europa y en la Am6rica
analizaron los paises desarrollados con los instrumentos analiticos creados enlas dos regiones. La metodologia, la teoria y los modelos resultados de estos
estudios se han considerado v61idos universalmente a otras sociedades. Por eso,
al testificar y refinar sus teorias y modelos, ellos no sintieron la necesidad de estu-

diar y investigar activamente las regiones cuyos varios datos principales no pu-

dieron ser obtenido facilmente. Los cientificos sociales pensaron que los estudios, por ejemplo, de Inglaterra contribuyeron a la teoria econ6mica, politica, ysociologica mas facilmente que los estudios laboriosos del Brasil. Especialmente los economistas japoneses han tenido tal pensamiento. En circulos academicos se consideraban como herejes los economistas que estudiaban el Brasil o la
Am6rica Latina. Asi, antes de la guerra los estudios del Brasil se hicieron por

muy pocos especialistas disciplinados y pocos interesados en la emigraci6n.
Pero estos estudios tuvieron el fin esencial de promover la emigraci6n y seconsideraron importante dar la base directa a la politica emigrante. Por eso,no se hicieron suficientemente el entendimiento interno del Brasil.

Sin embargo, la transformaci6n de las relaciones entre el Jap6n y el Brasil

despu6s de la guerra estimu16 bastante los estudios del Brasil. Como el Jap6n
perdi6 las regiones emigrantes y una parte del territorio en Asia, la Am6rica
Latina, especialmente el Brasil, se hizo la regi6n emigrante mas importante, yla emigraci6n por si misma cambi6 su caracter temporario en el permanente.

109

110

YOSHIAKI NISHIMUKAI

Ademas, desde la d6cada de 1950 las empresas japonesas han encontrado sus
campos de actividades en el Brasil, y recientemente las relaciones entre el Jap6ny el Brasil van a entrar en la etapa nueva en el sentido de que 6ste necesita decapital mas que de trabajo, y de la cooperaci6n econ6mica m6s que la emigraci6n. Esta transformaci6n necesita el entendimiento del Brasil no s61o parala promoci6n de la emigraci6n, sino para atender a las nuevas relaciones
econ6micas. Asi, recientemente los intereses academicos por el Brasil vienen acrecer. Esta tendencia se ve bien especialmente en las humanidades como lahistoria, la geografia, y la antropologia, y tambi6n en algdn grado en las ciencias
sociales.

Sin embargo, por el presente, el m6todo de los estudios del Brasil en el
Jap6n se limitan a profundizar los objetos por cada campo especial, lo cual es

mismo en el caso de absorber los conocimientosy las t6cnicas de los paises

desarrollados. Como hemos indicado, por medio de tal acercamiento, es muy
dificil entender el Brasil sint6ticamente. Japoneses han estudiado sobre China

por largo tiempo y tenemos diersas organizaciones para estudiar y instruir
sobre la cultura china. Pero, supimos por las experiencias de la guerra que noentendimos China sint6ticamente y internamente, a causa de la acercamiento a

los objetos por cada campo especial. Si tomamos el mismo m6todo, los estudios del Brasil en el Jap6n no podran menos de andar el mismo camino que en losestudios de China. Aqui, hay una cosa mas importante ; al estudiar del Brasil, que

es distinto del Jap6n y de los paises desarrollados de la Europa y los Estados
Unidos, los cientificos sociales del Jap6n intentan acercarlo a base de los instru-

mentos t6cnicos dados por los conocimientos europeos. Por ejemplo, en losestudios de la economia brasilefia se ve la tendencia de analizar por los mismos

instrumentos que en los estudios de los paises capitalistas desarrollados. En

los estudios de la economia brasilefia no puede ser totalmente adecuada la
adopci6n de los instrumentos analiticos de la economia moderna que son muy
abstractos y estan divididos minuciosamente. Aqui existe la limitaci6n de losestudios de la economia brasile a. Ademas, hay otro problema de que existen
las diferencias notables en la profundidad de los estudios por cada campo espec-

ial. Por ejemplo, en caso de que se estudian en detalle las t6cnicas del plandel desarrollo econ6mico del Brasil, si al mismo tiempo no se estudia la basepolitica y social del plan, no es facil 11egar al entendimiento vivido del plan.

En realidad, los estudios de cada campo especial no est6n en el grado igual, ypor eso los estudios sint6ticos sobre el Brasil son notablemente impedidos.
Esto es verdadero no s61o a diversas esferas de las ciencias sociales, sino a losinteriores de cada esfera.

LOS ESTUDIOS DEL BRASIL EN EL JAP6N
r METODO DO LOS ESTUDIOS DEL BRASIL
II EL
Los dichos defectos de los estudios del Brasil en el Jap6n se deben resolver

al pronto. Por eso tenemos que manifestar las causas de estos problemas. Ami parecer, se causan de lo pobreza metodo16gica de las estudios extranjeros en

el Jap6n. Si se estableciese la metodologia adecuada, podrian resolverse unosde los problemas. Recientemente, los estudios de 6rea-area studies-atraen
atenci6n extensiva como la metodologia de los estudios extranjeros. Estos
estudios de area prosperan primero en la Am6rica, Inglaterra, Francia, Alema-

niayRusia etc.? 9u6 son lop estudios de 6rea? Como el primer paso delentendimiento de esta concepci6n, tenemos la necesidad de comprender por qu6

se creo este nuevo m6todo. Primero, a medida que han crecido los intercambios entre los paises del mundo despu6s de la guerra, ha aparecido la reflexi6n

fuerte que no se comprenden bien uno a otro ; se han parcialmente hecho losestudios profundos y se han obtenidos los conocimientos de los paises extranjeros, pero no se ha comprendido sint6ticamente un pais ni la sociedad ni lospueblos. Por eso, se ha sentido mucho la necesidad del entendimiento profundo y sint6tico mas bien que los estudios especiales por cada esfera. En otras

palabras, se ha hecho gran tema, ante todo, el entender la biografia de una'tnaclon.
Sin embargo, no es justo considerar que los estudios de area han aparecidocomo m6todo conveniente solamente a los estudios extranjeros. La causa de laprosperidad de los estudios de area existe en le reflexi6n substancial de lasciencias en este siglo. O sea, procede de la reflexi6n contra la tendencia deldiferencialismo cientifico en el siglo XIX. Ha excitado los estudios de area lacritica aguda de que no se puede entender la 6rea objetiva verdaderamente por

medio de diferencialismo del siglo XIX. Como sabemos, en el siglo XIX lasciencias y los pensamientos se han especializado mucho y las t6cnicas metodo16gicas y cientificas se han profundizado y, en consecuencia, los conocimientos
detallados sobre cada esfera se han profundizado notablemente, y los conocimi-

entos objetivos y sistem6ticos se han incrementado en cantidad y han progresado en calidad. En otra parte, no se puede negar que las ciencias del siglo
XIX produjera el prejuicio tendente a los estudios especiales y individuos delas humanidades. Aunque los conocimientos se hizo profundos de resultas delos reconocimientos fragmentarios y parciales de las humanidades, al mismo
tiempo se hizo dispersos y aislados, y por consiguiente, no pudo evitar elpeligro de obstruir el entendimiento vivido o el reconocimiento org6nico ysint6tico de los objetos. Las ciencias han adelantado notablemente pero acompafiado la tendencia esencialmente diferente del pensamiento monistico del

111

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YOSHIAKI NISHIMUKAI

siglo XVIII. La estructura del conocimiento del siglo XVIII era somera pero

extensa. Tambi6n se critic6 que era enumerativa y enciclop6dica. Pero, en
otra parte, el conocimiento se combin6' a la vida humana y prob6 a entenderlas humanidades sinteticamente. Esto es un gran punto contrastante con el
pensamiento cientifico del siglo XIX.
La reflexi6n y la critica por las ciencias del siglo XIX comenzaron a apare-cer a principios de este siglo. Este fenomeno se ha desarrollado osadamente yliberalmente en los Estados Unidos donde el pensamiento del siglo XVIII se ha

relativamente mucho conservado y luego ha ido a enlazarse a "educaci6ngeneral " en la educaci6n universaria, en la cual el entendimiento sint6tico y elreconocimiento correlativo de todos los fenomenos culturales han precedido alos estudios especiales. El origen de los estudios de 6rea tambi6n existe en este

pensarniento. En este sentido, los estudios de area son una metodologia por lacual una sociedad es estudiada y investigada como cultura general.

Por lo tanto, los estudios de 6rea deben tener la actitud multi16tera ysint6tica. Es decir, deben ser los estudios integrados de la lengua, la geografia,

la historia, la politica, la economia, el pensamiento y la literatura de la area

objetiva. Pero tenemos que prestar atenci6n al punto siguiente. Los estudios
generales o sint6ticos no pueden ser el aprender los conocimientos primarios ypreliminares como se ve a veces. Debemos atender que la integraci6n o la
generalizaci6n se confronta con la departamentalizaci6n o la especializaci6n y al

mismo tiempo se combina intimamente con 6ste. En los estudios de area sesostiene la actitud de que las ciencias deben ser integradas y, al mismo tiempo,

diferenciadas y nuevamente integradas.

Asi, los estudios de area dan importanciaa"la integraci6n". Es natural
porque los estudios de 6rea tienen el fin de entender la area objetiva mas antes

que reconocerla. El problema es c6mose obtiene "la integraci6n". Sera
bastante facil combinar los estudio individuis de los especialistas disciplinados

en cada sefera especial. Pero, todavla no es claro c6mo la integraci6n se adeIanta y se termina en proceso de la combinaci6n. El Prof. E. O. Reishauer diceque los estudios de 6rea aparecen como combinaci6n de los estudios de diversas(1)
ciencias y todavia no crean las cosas nuevas. Necesitamos mas tiempo paraencontrar el medio nuevo de la integraci6n.
Sin embargo, a pesar de la dificultad de alcanzar la integraci6n, los estudios

de area en los Estados Unidos dan la sugesti6n particular a los estudios delBrasil en el Jap6n y tambien a los del Jap6n en el Brasil. Esto es que se(1) E. O. Reishauer and J. K Fairbank, " Understanding the Far East through Area Study",
Far Ettstern Survey, Vol. 17.

LOS ESTUDIOS DEL BRASIL EN EL JAP6N
aprende el lengua de 6rea y se estudia el conocimiento de area, como ambos
reudas, y ademas de las dos reudas, se hacen los trabajos de areaa fin de com.

pletarlos. Es manifiesto que en los estudios de area el campo de estudio mas
importante sea el de la lengua extranjera. En los estudios de area, el aprenderde la lengua de la area objetiva es la orden absoluta. Pero, en este caso, el

estudio de la lengua no es el objeto sino un medio para entender la 6rea. En
proceso de aprender la lengua de 6rea, sin que entendamos todos otros aspectosde la cultura nacional, no podemos aprender completamente la lengua por si
misma. Por lo tanto, aunque el estudio de la lengua extranjera es aparentemente aislado, se debe considerar como un parte de los estudios inclusivos de laarea. Por eso, se requiere unificar el estudio de la lenguayel entendimiento
de los conocimientos de otras diversas esferas.

Por lo tanto, en las universidades norteamericanas, ademas de la educaci6nde la lengua de area, se hacen simultaneamente las lecturas de la historia, lageografia, la antropologia, los regimenes juridicos, la politica, la sociologia, laliteratura, y el arte de la area objetiva. Las lecturas se hacen paralelamente por

los expertos de area quienes estudian especialmente una esfera. Los auditorios
se esfuerzan por integrar los conocimientos sobre la 6rea objetiva en los estudios inclusivos de las diversas lecciones y por obtener la resoluci6n de qu6 paises• En este curso, siempre se vigila la lectura cerrada de que un profesor
ense a una lecci6n. Se hace una lectura o un seminario por algunos profesores,y se trocan las opiniones especiales por medio de las discusiones activas. Asi,se puede obtener el entendimiento y el reconocimiento de cada punto de vista,
se alcance la integraci6n que es el fin Ultimo de los estudios de 6rea, y al mismo
tiempo, se obtiene el base para profundizar las preparaciones cientificas sepeci-

ales de las esferas por cuales cada estudiante tiene inter6s. Ademas, merece

atender que la investigaci6n en grupo siempre se requiere como un medio
concreto para impedir las malas influencias del diferencialismo en el cual losestudios individuos caen.

Finalmente, los trabajos practicos es un curso basico de los estudios dearea. Se completan por las experiencias directas en la area objetiva los estudios

de la lengua y los conocimientos de area en las universidades y otras organizaciones educativas. Las regiones de los trabajos pr6cticos son diferentes por laespecialidad de futuro de los estudiantes disciplinados. Por ejemplo, loshistoriadores trabajan en el museo de datos de la area, los soci61ogos en las
ciudades, y los antrop61ogos en las tribus pequefias o las comunidades pequefias.

Ademas, los trabajos practicos no se hacen individual ni dispersivamente, sino
sistematicamente. Por ejemplo, se establece el centro de la investigaci6n en un

113

YOSHIAKI NISHIMUKAI

114

pais objetivo en el cual se equipa los libros, las materias, y los utensilios necesa-

rios para los estudios, y tiene los directores que disciplinan efectivamente losestudiantes. A veces, se establecen los laboratorios en las universidades de laarea con sus cooperaciones. Sin embargo, trabajos pr6cticos son demaciado
dispendiosos para hacerlos con inter6s y cargo personales. Por lo tanto, se
dan a estos estudioslos fondos particulares, por ejemplo, el fondo que tienen
las universidades, el subsidio cientifico de las orgacizaciones oficiales, y la
subvenci6n concedidas por las fundaciones privadas.

III LOS PROBLEMAS DE LOS ESTUDIOS
DEL BRASILr EN EL JAPON
En los capitulos sobredichos resumimos los m6todos particulares de losestudios de area en los Estados Unidos. Comparando con estos m6todos, pode-mos responder el tema de qu6 debemos hacer para promover los estudios delBrasil en el Jap6n.

Primero, debemos aumentar o amplificar las universidades y las organizaciones en las cuales podemos aprender el portugu6s. Considerando la situaci6n

actual del Jap6n, podemos citar el fact de que el curso del portugu6s y delespafiol indispensables para los estudios del Brasil o de la America Latina hasido negado por casi todos los cientificos sociales. Como lenguas extranjeros
afuera del ingles, sus intereses se han concentrado exclusivamente al franc6s yel aleman. Esto es la resulta necesaria de que el fin principal de los estudios
extranjeros en el Japon era absorber las culturas avanzadas. Por consiguiente,

hoy las universidades y los institutos donde podemos aprender el portugu6s oel espafiol son muy pocos. En el tiempo de mayo de 1965, hay solo diez
universidades que establecen los cursos del portugu6s o el espafiol como losregulares. El ndmero de los estudiantes son 525 personas en total. La mayoria
de estes estudiantes son los de la literatura espafiola y la minoria los de laliteratura Iatinoamericana. Ademas de dichas universidades, hay ocho universidades donde se ensefia la conversaci6n elemental. Hay tambien unas organizaciones donde se ensefia la conversaci6n espafiola en t6rmino corto, principal-

mente en las ciudades grandes, pero no se puede saber el nfimero exacto.

El estudio del portugu6s esta en el estado mas dificil. De dichas diez
universidades, hay solo dos que ensefian el portugu6s como curso regular y elntimero de los estudiantes son solamente 50. Como las oportunidades deestudiar el portugu6s se limiten notablemente, no puede menos de hacersedelgado el estrato de los especialistas disciplinados de los estudios del Brasil.
Al presente, en el Jap6n no son pocos los estudiosos especializados en el Brasil

DELBRASILEN EL JAP6NLOSESTUDIOS
que no saben el portugu6s bien. Esto es el fenomeno mucho mas extrafio y particular en el Jap6n que el de estudiar del Brasil desde vista de cada esfera especial

y entender el Brasil por medio de los instrumentos modernas de analisis creados

en la Europa y los Estados Unidos. Los estudios del Brasil dependen directa-

mente de los datos en ing16s y franc6s, y ponen en contacto con el Brasil
solamente por estas lenguas. Si se corrige s61o este fenomeno, progresaran
notablemente los estudios del Brasil en el Jap6n. En este sentido, se debe con-siderar los proyectos concretos lo m6s pronto posible para difundir mas eltportugues.
Segundo, es el problema sobre aprender los conocimientos de la area. En
el Jap6n podemos aprender los conocimientos sobre el Brasil principalmente enlas universidades donde se ensefian el espafiol y el portugu6s. Pero, al presente,

hay s61o tres universidades donde se aprenden no s61e los idiomas sino los co-nocimientos de la 6rea. Ademas, estas universidades dan gran importancia alos idiomas y la lecci6n de los conocimientos sobre la 6rea es insuficiente. Porejemplo, en una cierta universidad, se hacen las lecciones de 2,160 horas
durante cuatro afios, y de las cuales 780 horas (o sea, 36%) se asignan alaprender el idioma, segundo 600 horas (unos 28%) a los estudios generales
como las humanidades, las ciencias sociales, y las ciencias naturales. Estes dos

estudios ocupan 64% de las horas de todas las lecciones. El resto, 36% seasigna a la obtenci6n de los conocimientos de area que incluyen no s61o lossobre el Brasil o la America Latina sino los sobre otras regiones. Por eso, lashoras de las lecturas especialmente sobre el Brasil son muy pocas. En otra
universidad, todas las iecturas son 2,220 horas, de las cuales las sobre Ia
Am6rica Latina (las sobre condiciones econ6micas son 20 horas, las sobre Ia
cultura latinoamericana 30 horas, y las sobre la teoria econ6mica en la Am6rica

Latina 60 horas) son 180 horas en total, o sea solamente 8.1%. Los conocimientos sobre el Brasil se aprenden como un parte de los conocimientos generales
sobre la Am6rica Latina, y por eso, la obtenci6n de los conocimientos del Brasil

ocupa la menos proporci6n.
Podemos considerar unas causas de que hay muy pocas oportunidades para
aprender los conocimientos sobre el Brasil. El cansa mas importante esta en
el hecho de que hay notablemente pocos especialistas de las lecciones componentes de los conocimientos de la area. Como he descrito, en los Estados
Unidos, temiendo por la lectura cerrada en el sentido de que un profesor ensefia

una lecci6n, a veces cada lecci6n se hace por unos profesores. En otra parte,en el Jap6n, es imposible mfis bien que dificil obtener un profesor por cadalecci6n, y muchas veces, un profesor ensefia unas lecciones como la cultura, la

115

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YOSHIAKI NISHIMUKAI

sociedad, la economia, y la politica latinoamericanas.

Tercero, es aumentar las ocasiones de los trabajos pr6cticos en la tirea. En
la actualidad, son muy frecuentes los casos de que los estudiantes, los especial-istas disciplinados, y los profesores universitarios del Jap6n estudian en lospaises desarrollados como los Estados Unidos, Inglaterra, Alemania y Francia.

Y ademas, sus muchos casos est6n basados en el sistema establecido entra el
Jap6n y estes paises. Pero, se limitan notablemente las ocasiones para hacer
trabajos practicos como un parte de los estudios de area, visitando a los paises
latinoamericanos o el Brasil. Adem6s, la mayoria de las ocasiones son personales

y incidentales. Todavia no se establece el sistema permanente del intercambio
de los especialistas como entre el Jap6n y los paises desarrollados. Hay unos eje-

mplos de que unos especialistas disciplinados j6venes y ardientes quienes aprenden el portugu6s bien y obtienen Ios conocimientos sobre el Brasil, no tienen
las oportunidades para hacer los trabajos practicos y por fin, van a estudiar en

los centros de los estudios de la Am6rica Latina en las universidades norte-amencanas.

IV CONCULSI6N
En los capitulos sobredichos se muestran la situaci6n actual y los proble-

mas de los estudios del Brasil en el Jap6n desde punto de vista del m6todo delos estudios de area. En cada esfera de las ci6ncias sociales, ademas de estes

problemas, existirian diverses problemas concretos. Estes problemas no selimitan s61o a los estudios del Brasil, sino a los de otros paises latinoamericanosen el Jap6n. Los especialistas disciplinados de la Am6rica Latina tienen inter6s

comthn en la soluci6n de estes problemas, y recientemente prueban a adelantar

los estudios de la Am6rica Latina con sus cooperaciones. En septiembre de1964, se establece la Academia de la Ciencias Sociales de la Am6rica Latina, enla cual participan unos sesenta especialistas desciplinados y gradualmente amplifican la actividad con el fin de los intercambios de sus estudios, de los estudios

integrados, y de la difusi6n de los conocimientos sobre la Am6rica Latina.
Al considerar la intimidad presente entre el Jap6n y el Brasil, es natural

que los estudios del Brasil en Jap6n adelanten m6s notablemente que los deotros paises latinoamericanos. En realidad es extrafio que por lo menos losestudios del Brasil en las esferas de las ciencias sociales, come he escrito, estan
en el nivel tal bajo.

Las relaciones del Jap6n con el Brasil-por ejemplo, la existencia unos
600,OOO personas originarias del Jap6n y las actividades de mas de 30 empresas

japonesas-son intimas incomparablemente con las de otros paises extranjeros,

EN EL JAP6NLOS ESTUDIOS DEL BRASIL
Nosotros, los especialistas disciplinados, debemos reflexionar en
esforzar por profundizar los estudios del Brasil en el Jap6n.

117

este punto y

KOBE ECONOMIC & BUSINESS REVIEWCONTENTS

NO. 1 (1953)
Present Day Significance of Free Ports .............................,..................Ginjiro Shibata

Development of Devaluation-Problem in Post-War Japan........................Kiyozo Miyata
Japan's Trade with South and South-East Asian Countries .................... Fukuo Kaxvatct
The Exchange Control Policy in Post-War Japan .................................Masahiro Fwfita
On the OMcial Statistics of Foreign Trade in the Post-War Japan ............Hikoji Katano
On Business History ................"."............."...".............."..........-...Tadakatsa Inoue

Problems of Regional Industria1ization in Japan ....................................Minoru Beifea

A Research of Wage Income in Post-War Japan .......................................Nobuko Nose
Revaluation in Japan ................. .................... .............................Susumu VVatanabe

Last-In, First-Out Inventory Method under the Japanese Tax Law ..,Munehiro Masu2aki

NO. 2 (1954)
Movements for the Establishment of Free Ports in Japan .....................Ginjiro Shibata
Japan's Trade with Latin America in the Post-War Years .....................Fukao Kaxvata
The Maritime Competitions in the Early Meiji Era ....................................Sei 'i Sasaki
Two Deflations in the Showa Era ......................................................Masahiro F"j`ita

Estimation of the Effectiveness of Devaluation on
BaIance of Payment Deficit in Japan .......................................Hikoji Katano

The Recovery Method of the Japanese Shipping Industry
inPost-WarPeriod ...................................................Hiromasa Yamamoto
Business Accounting and Tax Accounting .......................................Susumu JVatanabe

Spatial Characteristics of Industries Relative to Their
Business Features .."".H..."......"".-.h....-........................."Minoru Beika
Stages in Factory Organization .........................................................Tadahats" Inoue

Accounting for Fixed Assets Revaluation; RecentViews in Japan ...Munehiro Masuxaki
On the Structure of the National Income Distribution in Japan ...............Nobuko Nose

NO. 3 (1956)
Industrialization and International Trade ............................................ Fuleuo Kaxvata

Econometric Determination of Foreign Exchange Rate of Japanfor 1926-1953 ."...".H.."..."............................."..................Hikoji Katano
Present Status of Japan's Shipping ......................................................Ginjiro Shibata

The Distinction between "Shasen" and "Shagaisen" as Historical
Concepts in Japanese Shipping............................. ....................,SeiJ'i Sasaki.

The Banking System in the Middle Meiji Era (1870-1910) ..................Masahiro FaJ'ita
Disposition of Cost Variances in Japanese Tax Law ........................Susumu IVatanabe
Structure of Industrial Districts in Japan ....................................,........Minoru Beika

Note on the ZAIBATSU Combines...•-........................................"....Tadahatspt Inoue
On the Model-Building for Social Accounting Design ..............................Nobuko Nose

NO. 4 (1957)
The Impact of Exchange Policy on the International Economy
of Japan during the Period 1930-1940 ........................... .Laurence P. Dozvd
A Note on the Recent Trends of Japan's Foreign Trade .............. .........Fukuo Kazvata

The Development of Overseas Banking System in Japanin the Meiji Era ...............................................................Masahiro Fuy'ita

More on the Structure of National Income Distribution in Japan ............Nobufeo Nosg
Reconstruction of the Theory of Purchasing Power Parity .....................Hikoji Katano
Tramp Shipping Freights and International Trade .••....•......................Ginjiro Shibata
A Little Study on the Transition from the Sailing Vessel to
Steamer in Japan "...................................................................Sei'i Sasaki

On the Regulating Policy of Japan Against the Shipping
Conference--Especially in Relation to the Refusal of
the Entry to New Comers ..........................................Hiromasa Yamamoto
The Price Fluctuation Reserve System in Japan ..............................Susumu VVatanabe

Locational Problem in the New Major Branches of JapaneseIndustries from 1954 to 1956...................................................Minortt Beika
Business Problems in an International Situation .................................Tadakatsu Inoue

NO. 5 (1958)
History of Yen-Its Developments in the Japanese Economy (1) ............Hiroshi Shinjo
Fundamental Features of the Accumulation of Capitalin the Late Meiji Era............."..........................................Masahiro Fwfita

Some Aspects of Japan's Trade with South andSouth-East Asia, 1950-1957 ............".....................................Fuletto Kawata

Curves of Diminishing Values of Japanese Merchant Ships
in Proportion to Their Age .......".......................................Ginjiro Shibata

The Modernization of Japanese Shipping Based on theTransportation of Hokkaido Marine Products ...........................Sei'i Sasaki

Development of the Marine Insurance Industry in Japanin the Meiji Period ... ...............................................Hiromasa Yamamoto
A Assimilapao do Imigrante Japones no Brasil .......................................Hiroshi Saito

Rate of Profit and International Specialization of Production ..................Hikoji Katano
Replacement Cost and Lifo Cost ...................................................Susttmu Watanabe
Spatial Problems of Business Activities ................................................Minora Beika

The Nature of the Morgan Control ...................................................Tadukats" Inoue

On the Effect of Accelerated Amortization for Tax Purposes.....................Nobuko Nose

NO. 6 (1959)
History of Yen-Its Developments in the Japanese Economy (2) ............Hiroshi Shinjo
The Central Banking Po1icy in the Meiji Era,......................................Masahiro FuJ'ita

Economic Growth, Balance of Payment and Capital Movement ...............HikeJ'i Katano
World Trade and Japan's Export-1953-1957- ....................................Fukuo Kawata
Alguns Aspectos da Mobilidade de Japoneses no Brasil ...........................Hiroshi Saito

Problems of Emigrant-Transportation in Japan ...........................Hiromasa Yamamoto
Port Labor Conditions in Japan ....-.".......".......................................Ginjiro Shibata

The Development of the Concept "Operator" in Japan ..............................Sei'i Sasaki
Single Industry Towns in Japan ............................................................Minoru Beika

On the Application of the Social Accounting
Principle to Business Accounting ..........................................Nobuko Nose
Valuation of Work in Process.........................................................Susumu IVatanabe

Developmental Stages Relating to Theories
of Stock-Equity Accounting.h......."...."..........".....................Rornji Takeda
On the Rate of Interest in Business Administration ......................•..••.•.••••••••.Jiro Ono

Various Classes of Data Processing by Means of Electronic Computer ......Hidee Kitani
Company Histories in Japan ..............................Tadakatsu Inoae and Yoshiro Ikushima

NO. 7 (1960)
Japanese Emigration and Its Effect on International Payments ...............Ginjiro Shibata

One-to-One Correspondence Between Goods and Factor Prices ...............Hikoji Katano
The Gold Standard and Banking Capital in Japan.................................Masahiro FuJ'ita
World Trade and Economic Growth ...................................................Fakuo KaTvata

Singu!arity in the Structure of the Seamen's Union of Japan .........Hiromasa Yamamoto
Some Reflections on Inter-Comparability of Social Accounting ..................Nobuko IVose
The Meaning of Inventories .........................................................Susecmu Watanabe

Structure of Income Determination on the Balance Sheet ........................Roruj'i Taleeda

On the Value of Stock Rights and Its Significance in Corporate Finance .........Jiro Ono
Business Features and Management Policies of Industrial
Enterprises in Local Districts of Japan...................................,Minortt Beika

NO. 8 (1961)
The Industrial System and Industrial Education in Southeast Asia Now on
the Threshould of Reform; and Japan's Position therein .........Kiyo2o Miorata
Industrial Structure and Educational System in India ... ....................Tadao Miyashita
Industrial Education in India .........•••...••..H."..."............................Tadao Miyashita
Technical Education in India .........................................................Tadao Miyashita

Industrial Structure and Vocational Education in Thailand ..................Fuleuo Kaxvata

The Industrial Structure and Industrial Educationin the Philippines .."....".".--.."......"...................H.."...Tei-ichi Yamasaki

Industrial Structure and Vocational Education in Indonesia .........Hiromasa Yamamoto

NO. 9 (1962)
Problems in Port Administration and Finance in Japan ........................Ginjiro Shibata
Types of Early Modern Japanese Shipowners,............................................Sei'i Sasaki

On the Employment System of Seamen in Japan ...........................Hiromasa Yamamoto
A Study on Japan's Invisible Trade.....................................................,Fukao Kawata

Problems of Industrial Location relating to Regional Development
in Japan ..............................................................................Minoru Beika

The System of Inside Contracting .....................,.............................Tadakatsu Inotte

A Critique on Professor Mahalanobis Model of Economic
Planning in India ......" ....""......."....,................................Hileoji Katano

National Income Concepts: Reconsidered.. .............................................Nobuleo Nose
Some Problems of the Installment Basis ...........................•..•...........Susumu Watanabe

On the Purposes of a Going-Concern Valuation and its Natures ••....•.....•........Jiro Ono

Die Betrachtungsweise der neueren betriebswirtschaftlichen
Kostentheorie......................•. .......,..."........".".-..."."..-Tetstto Kobayashi

NO. 10 (1963)
Revised Accounting Provisions of the Cornmercial Code of Japan-with Special Reference to the
Corporation Income Tax Law-... ..................•................Susumu VVatanabeSocial Accounting as an Instrument of Policy.........•••.............-....•...........Nobuko Nose
Industrial Estates for Small Businesses in Japan ......•••••••••..........•..........Minoru Beika

Rise of the Mutual Financing Business in Japan .........•..••..................,Tadakatsu Inoue

The Introduction of European-Style Vessels in Japan:
A Historical Survey.".m.....H.."....-...."..........H.-................"...Sei'i Sasaki

On Industrial Relations in Japan's Shipping Industry-withSpecial Concern on Personnel Management- ...............Hiromasa Yamamoto
Regional Disparities in the Brazilian Economy :A Case Study on the Brazilian Northeast ..................... Yoshiaki Nishimukai
The Basic Concepts of Going-Concern Valuation .........................................,Jiro Ono
A Study on the Current Cost Theery of Fritz Schrnidt..............................Isao Naleano

Die Kostenbegriffe ftir die betriebliche P]anung ... ..............•••... . •....Tetsuo Kobayashi

Introducing Prof. Shinjo's "Hjstory of the Yen" .................... .. .,Zentaro Matsttmura

NO. 11 (1964)
Accounting Profit and Taxable Income ..........................................Susuma I)Vatanabe
On Integration in Economic Accounting ................................................Nobuko Nosetiber ,,Cost Accounting Standards" in Japan .................,..................Tetsuo Kobaorashi
A Note on the Lohmann-Ruchti Effect ..............,................................... Isao Nakano

Management Approach to Regional Development Problems in Japan .........Minoru Beika
A Research Report on Othce Automation of Middle-Scale Cities in Japan ........ Jiro Ono
Die Geschichte der Privatisierung ............,..................................... .. Masaora Ok.ada

Recent Trends in the Balance of Payments of Japan ......,.................,.....Fukuo Kazvata
Leng-Term Finance in Post-War Japan (1).................. .......................Masahiro Enjita

A Chronological Table of Modern Japanese Shipping-No. 1; 1600-1799......Sei'i Sasaki
The Continuous Ernployrnent of Seamen in American Shipping
Industry ...............,., ......h..................... ................ Hiromasa Yamamoto

Some Problems of the Brazilian Economic Development Plan
(1963-1965)................................ .............................. Yoshiaki Nishimeckai

NO. 12 (1965)
Special Depreci'ation and Reduced Entry ...,..................................,Susumu I]Vatanabe
Electronic Data Processing System in Japan .........,...............................,Minoru Beika

A Chronological Table of Modern Japanese Shipping-No. 2,
1800-1912 "....".........,,......"...................................................Sei'i Sasaki

Overseas Operations of Japanese Business Enterprises in Brazil ............Tadakatsu Inoue
A Note on Economic Accounting for Government Sector ..........,.............Nobecko Nose

International Liquidity and the Tokyo Meeting of the International
Monetary Fund ...................................................,............Masahiro Fujita

Intersectoral Transaction Table with Endogenous Foreign Trade Sector in
the Indian Ecoi)omy: 1955/56..............................••.....••.........Hikoji Katano

The System of Reserved Mernbers for Seamen before World War II-The Employment System of Seamen in Japan- .........Hiromasa Yamamoto
On the Automation of Banklng in Japan ........................•••--•.......•......,........ Jiro Ono

A Presente Etapa do Desenvolvimento Econ6mico do Japfio ....,...... Yoshiaki Nishimukai
Kostentheorie und dispositiver Faktor ............................................. Tetsuo Kobaptashi

Grundprobleme der Privatisierung ... ..... ..,...............-,.,..................•...Masaya Okada

NO. 13 (1966)
Annual Income under the Corporation Income Tax Law ......•....•......Susumu I)Vatanabe
Trade Controls in Occupied Japan (1945-1949) ..................................••Fukuo Kaxvata

Patterns of Domestic Shipping Services-Characteristics of Japanese Coastwise Shipping- .....................Sei'i Sasaki
Approaches to the History of Individual Business Units ............•••......Tadakatsa lnoue
Cumulated Cost Ratios for the Japanese Economy in 1955 ..........•-.........••.Nobuho Nose
Accelerated Growth of National Income ..........................,.........•......•.Hileoji Katano

Technological Development and Labour Relationsin the Japanese Shipping Industry ....•.i..•........ ..•-.......Hiromasa Yamamoto

Brazilian Position in the Latin American Free Trade
Association ...,................. ........,........,.......................Yoshiaki ?Vishinecrkai

Information Specificatien for Business Management (I)-A Case Study- ...."....-".."...."", ....".............".".................." Jiro Ono
Die Privatisierung der PreuPag.,.......,.............................,....................Masaya Okada

KOBE UNIVERSITY ECONOMIC REVIEW 1966
Edited by Faculty of Economics,
Kobe University, Kobe, JapanCONTENTS
A Measurement of Douglas Production Function for Japan's Cotton
Industry during the Pre-War Period ...••.,..•........,..............Hidetaro lyemoto
A Model of the Farm Problem in a Closed System.................................Osamu Tanaka
Einkommensverteilung und Klassenstruktur ....................................Toshimasa Mukai

On the Influence of Tax System upon Capital Accumulation
through International Comparison ....................................Kaxuo Nakamura
Export Base and Infant Export Industries .....,.................................Atsushi Murakami

On Taxation System in Communist China ..........................................Akira Fuj'imoto

The Circulation of Commodity and Use of Money in
Early Medieval Japan ......"................................-....•........-Tetsuo Kamiki

THE ANNALS OF THE SCHOOL OF
BUSINESS ADMINISTRATIONKOBE UNIVERSITY 1966
Edited by The School of Business Administration,
Kobe University, Kobe, JapanCONTENTS
Accounting of Allowance for Lost Cost-Valuation at the Lower of
Cost or Market Reconsidered- •••••••••........•.....................Katsnji Yamashita
Minimization of the Rates of Public Enterprises .................................Tatsuo Takenaka

Studies in the Problems of Medium and Small Industries in Japan ............IVoboru Inaba

Ober die bkonomische Bewertung der Investition im Verkehr ............Kazuo Akiorama
Neuere Entwicklungen in der Grenzplankostenrechnung .....................Tetsuo Kobayashi

Der handelsrechtliche JahresabschluP der japanischen
Aktiengesellschaft .......-.......".........."......"................-MasatoshiKuroda

KOBE UNIVERSITY LAW REVIEWInternational Edition 1965

Edited by Faculty of Law,
Kobe University, Kobe, JapanCONTENTSJapan's Private International Law in its Making :A Historical Review .......H.........."."..-H..................."...". Taro Kawakami

Attualitb del diritto marittimo giapponese....•....-••...••.•••••............................................................,...HiroshiKubota

Codice della Casa dei minorenni
L. 15 luglio 1948, n. 169 ......................................................Hiroshi Kubota

Aktienwesen nach dem getinderten japanischen Handelsgesetz••••••••-•••••i•••••••-•-•••••-•••-•--•h.h............................-......IchiroKawamoto

THE RESEARCH INSTITUTE FOR ECONOMICS AND
BUSINESS ADMINISTRATION, KOBE UNIVERSITY
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HISTORICALSKETCHIn 1919, a research organization named the Institute for Commerce wasfounded in Kobe Higher Commercial School, one of the chief predecessors ofKobe University, with a gift made by F. Kanematsu & Company, a Ieading
mercantile firm in Kobe. The organization was designed to carry on and facilitate integrated research on business and commerce and to formulate andpublish the results of these studies and investigations in such form as to makethem available to the business community.

With the founding of Kobe University of Commerce, successor of Kobe
Higher Commercial School, in 1929, the Institute extended its research activities by adding several divisions. One was the famous Latin-American
Library, which soon became the center of research in this field in Japan. A
room for statistics equipped with various computing machines was establishedand began publication of "Juyo Keizai Tokei" monthly and "Sekai Boeki
Tokei" annually. A filing room was prepared to deposit press clipping files

systematically arranged by topics and dates. Another room was designed to
become the center of all possible original records and data having to do withthe beginning and progress of Japanese business.

On the campus of Kobe University of Commerce, another organization
named the Institute for Business Mechanization was founded in 1941 utilizing

business machines donated by the IBM Corporation and others. With
Professor Yasutaro Hirai as its head a broad and forward-looking plan forbusiness mechanization in Japan was developed.

In 1944, Kobe University of Commerce changed its name to Kobe University of Economics. After the war, however, the University was consolidated with three other colleges in Hyogo Prefecture to become Kobe University. With this development, the two Institutes were also amalgamatedinto the Research Institute for Economics and Business Administration,
Kobe University. At present, the Institute, with its seventeen full-time
professional staff members, carries on studies and investigations in inter-national economy, business administration, and business mechanization in
Japan.

LOCATION AND BUILDINGSThe Research Institute for Economics and Business Administration is
located on the campus of Kobe University, Rokko, Kobe. It is a three-story
building named the Kanematsu Kinenkan and has a floor space of about 2,900
square meters, which includes a president's room, forty-one odices, six rooms
used as a library, a room for statistics, three conference rooms, etc. Adjoining is a one-story building recently built to install business machines.

ORGANIZATION
Under the directorship of a president, the Institute operates

with two

research groups one of which consists of five sections while theother hasfour sections. Each research group and its sections are as follows :A GroupofInternationalEconomy(1) InternationalTrade(2) Economy of Latin-America(3) MaritimeEconomy(4) International Finance(5) International Law of Economy

B GroupofBusinessAdministration(1) Business Administration and Business Mechanization(2) Accounting(3) InternationalManagement(4) LaborProblems
Besides the regular work of the Institute organized in thismanner,research committees may be created to carry on any special work requiring
the joint study of academic and business circles. At present, there are threecommittees, that is, the Finance Committee, Latin-America Committee, andInternational Economy Committee.
For convenience and greater eMciency in carrying out its research
activities, the Institute has a general oflice which is responsible for, 1) thecollection and preservation of a comprehensive collection of books, periodi-

cals, pamphlets, and original records and data of finance, trade, commerce,industry and business generally; 2) the classification, cataloguing, indexing,
arranging, annotation and compilation of these research materials; and 3) the

formulation and publication of the results of the investigations and studies
accomplished by the professional staff members of the Institute.

As an afliliated institute, the Documentation Center for Business Analy-

sis bas been recently established. It is the first systematic information
facility in the field of business administration in Japan that has been re-cognized and authorized by the Ministry of Education. The purpose is tocollect and to make intensive control of all kinds of materials on businessadministration and to make them available to scholars, universities, govern-ments, and business world with the aid of modern documentation techniques.

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THE RESEARCH INSTITUTE FORECONOMICS & BUSINESS ADMINISTRATIONKOBE UNIVERSITY

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Director: Minoru BEiKA

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Secretary : Hirotake SAKA[

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1 GROUP OF BUSINESSGROUP OF INTERNATiONAL
ECONOMICRESEARCH i ADMJNISTRATIONRESEARCH

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Fukuo KAwATA

Professoroflnternatienat i Susurnu WATANABE Professor of Accounting

Trade Dr. of Economics l Dr. of Businessl Administration::i

SASAKtSeiji;

Economy i Minoru BmKA Professor of Businessi1

Dr. of Economics i Administration and

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Taro KAwAKAMI

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Jiro

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Masahiro Fu]ITA

FinanceDr.ofEconomics i
Assoeia':,r

te professor of 11/ NObUkO N9SE AAcS2gCuinattien:rOfessOr of

America. I tration

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profe$sor of lnternatiomal l Managernent

Regionsl Study on Latin l Dr. of Business Adminls-:,iInternationalLavv l Administration

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Professor of Private l Dr. of BusinessDr. of Law;: Tadakatsu lNouE Professor oflnternationalilProfessor of Maritime :HikojiKATANO

Assoelate Professor of /International Trade I JirO ONe A$sociate Professor ofi' Business Administration

AssociateProfessorof l and Business MechaniHirornasa YAMAMOTOli

F- i zation
MaritimeEconomy

Yoshiaki NLSHIMUKAI AssociateProfessorofRe- i HidekiYesH[HARA ResearÅëhAssociateof

gional Study on Latin l: International Manage-

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America : rnentiOffice : The Kanematsu Memorial Hall,THE KOBE UNIVERSITYROKKO, KOBE, JAPAN: