Y4 , / 6' 3Y 7 0 D 741,

. Ar 513

--... 1399 

DEVELOPMENT OF THE RYUKYU ISLANDS

GOVERNMENT

Storage

HEARING T

:11 66 BEFORE THE

COMMITTEE ON ARMED SERVICES

UNITED STATES SENATE

EIGHTY-NINTH CONGRESS

SECOND SESSION

ON

H.R. 12617

TO AMEND THE ACT PROVIDING FOR THE ECONOMIC AND

SOCIAL DEVELOPMENT IN THE RYUKYU ISLANDS

"41) JUNE 9, 1966

Printed for the use of the Committee on Armed Services

U.S. GOVERNMENT PRINTING OFFICE

68-607 WASHINGTON : 1966
tr,m,

COMMITTEE ON ARMED SERVICES

RICHARD B. RUSSELL, Georgia, Chairman

JOHN STENNIS, Mississippi

STUART SYMINGTON, Missouri

HENRY M. JACKSON, Washington

SAM J. ERVIN, JR., North Carolina

HOWARD W. CANNON, Nevada

ROBERT C. BYRD, West Virginia

STEPHEN M. YOUNG, Ohio

DANIEL K. INOUYE, Hawaii

THOMAS J. McINTYRE, New Hampshire

DANIEL B. BREWSTER, Maryland

HARRY F. BYRD, JR., Virginia

LEVERETT SALTONSTALL, Massachusetts

MARGARET CHASE SMITH, Maine

STROM THURMOND, South Carolina

JACK MILLER, Iowa

JOHN G. TOWER, Texas

WILLIAM H. DARDEN, Chief of Staff

CHARLES B. KIRBOW, Chief Clerk
oc-r 75.

1966

CONTENTS

Statements of—

Hon. Thaddeus Holt, Jr., Deputy Under Secretary of the Army for

International Affairs 

Lt. Gen. Albert Watson II, High Commissioner of the Ryukyu

Islands 

III

Page

2

2

DEVELOPMENT OF THE RYUKYU ISLANDS

THURSDAY, JUNE 9, 1966

U.S. SENATE,

COMMITTEE ON ARMED SERVICES,

Washington, D.C.

The committee met, pursuant to call, at 10:30 a.m., room 212, Old

Senate Office Building, Senator Richard B. Russell (chairman)

presiding.

Present: Senators Russell of Georgia, Stennis, Symington, Cannon,

Young of Ohio, Inouye, Brewster, Saltonstall, Smith, and Thurmond.

Also present: William H. Darden, chief of staff; T. Edward Braswell and Gordon A. Nease, professional staff members; Charles B.

Kirbow, chief clerk; and Herbert S. Atkinson, assistant chief clerk.

Chairman RUSSELL. The first item on the agenda this morning is

12617, which would increase from $12 million to $25 million the

amount authorized to be appropriated in any fiscal year for programs

within the Ryukyu Islands that are approved by the President.

(The bill referred to follows:)

[H.R. 12617, 89th Cong., 2d sess.]

AN ACT To amend the Act providing for the economic and social development in the Ryukyu Islands

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That section 4 of the Act of July 12, 1960, Public

Law 86-629, as amended (76 Stat. 742), is amended by striking out the figure

"$12,000,000" and inserting the figure "$25,000,000" in place thereof.

Chairman RUSSELL. Many members of the committee will remember that the basic authority for U.S. programs for the promotion of

economic and social development in the Ryukyu Islands was enacted

in 1960. The departmental proposal would have authorized a setaside of not more than $6 million annually of the Federal income taxes

withheld from persons stationed or employed in the Ryukyu Islands

and this amount would have been available for obligation and expenditures within limitations provided in appropriation acts for programs

approved by the President for the development of the Ryukyu Islands. In 1960 the committee converted this language into an outright authorization for the appropriation of not to exceed $6 million

annually. .

In 1962 the Department proposed to increase the maximum authorization to $25 million, but this committee and the Senate recommended a ceiling of $12 million. That is today's ceiling.

The Congress now is asked to go to the $25 million maximum, but

the indication is that the appropriations for the next fiscal year would

be $17.3 million.

There are a number of important witnesses here who are interested

in this bill.
2 RYUKYT.J ISLANDS

Mr. Thaddeus Holt, Jr., Deputy Under Secretary of the Army for

International Affairs, is the first witness. Following Mr. bit's statement the committee will go into executive session to hear Lt. Gen.

Albert Watson II, High Commissioner of the Ryukyu Islands.

STATEMENT OF THADDEUS HOLT, JR., DEPUTY UNDER SECRETARY OF THE ARMY FOR INTERNATIONAL AFFAIRS; ACCOMPANIED BY LT. GEN. ALBERT WATSON II, HIGH COMMISSIONER

OF THE RYUKYU ISLANDS; AND RICHARD L. SNEIDER, COUNTRY

DIRECTOR, JAPAN, THE DEPARTMENT OF STATE

Chairman RUSSELL. Mr. Holt, you may proceed.

Mr. HOLT. Thank you, Mr. Chairman.

Mr. Chairman and gentlemen, I am Thaddeus Holt. I have been

Deputy Under Secretary of the Army for International Affairs since

December 10 last. I am representing the Department of Defense

and, more specifically, the Secretary of the Army who, as you know,

is responsible for supervising the civil administration of the Ryukyu

Islands. I am glad to join with Lt. Gen. Albert Watson II, the High

Commissioner of the Ryukyu Islands, in appearing before you in

support of the bill before you, H.R. 12617, which would amend

Public Law 86-629, familiar to us as the Price Act, to increase to

$25 million annually the standing aid authorization for the Ryukyus.

Mr. Chairman, I know that you and the members of this committee

are familiar with the key role of the island of Okinawa, the principal

island of the Ryukyus chain, in helping meet U.S. commitments in

the western Pacific area. The strategic importance of the Ryukyus,

and particularly Okinawa, is so well known that I do not need to

discuss it at great length. However, a brief review may be helpful

to your consideration of the proposed amendment.

The United States has developed a tremendous military base,

comprising installations of all the military services, on Okinawa.

These installations are important to us principally because of their

geographic location and the freedom of action which we enjoy in the

Ryukyus. The islands are located in the arc of free nations which

runs from Japan and Korea in the north through Taiwan to southeast

Asia. Under the terms of article III of the peace treaty with Japan

the United States exercises full powers of administration, legislation,

and jurisdiction over these islands, their territorial waters, and their

inhabitants. As a result we have freedom of movement of troops,

weapons, equipment, and supplies into and out of the islands, without

hindrance and without the delay which might otherwise occur in

meeting procedural requirements of a foreign government.

The Ryukyus serve a threefold purpose in our deployments to meet

our security commitments in the western Pacific. They provide a

centrally located logistical base; they provide a close-in staging area

and operational base for U.S. forces with missions in the western

Pacific; and they are an important center of military communications

:and transportation. Moreover, the Ryukyus serve other important

purposes, such as providing sites for major Voice of America operations. The value of this base has been demonstrated repeatedly,

from the time of the Korean war to the present day. Indeed, today

this base is playing an increasingly important role in the support of

operations in Vietnam.
RYUKYU ISLANDS 3

Although we have the legal right to continue to use these islands

freely for the important purposes which I have outlined, it is fundamental that with authority goes responsibility. Further, the effectiveness of any base obviously depends on a favorable attitude in the

community in which it is located. So far, most of the people of the

islands have given reasonable acquiescence to our presence, and our

base on Okinawa has functioned generally in an atmosphere of cooperation and friendship.

There must also be cooperation among the United States, the

government of the Ryukyu Islands, and the Government of Japan.

As to the Japanese relationship, you know that it is U.S. policy to

retain this base only so long as conditions of threat and tension exist

in the Far East. The U.S. Government has publicly declared that

"residual sovereignty" over these islands rests with Japan. The

Ryukyuans are Japanese and would prefer to return to Japanese administrative control, despite their generally friendly attitude toward

the United States.

In order to carry out the purposes of the Price Act that "every

effort shall be made to improve the welfare and well-being of the

inhabitants of the Ryukyu Islands and to promote their economic

and cultural advancement, during such time as the United States

continues to retain authority over the Ryukyu Islands," our efforts

must be planned carefully and must be coordinated not only with

those of the Ryukyuans, helping them to help themselves, but also

with those of the Government of Japan. To insure that effective

use be made of the various sources of funds which are available,

General Watson instituted a long-range planning and programing

system jointly with the government of the Ryukyu Islands shortly

after his arrival on August 1, 1964. The goals of the plan are those

which had been set forth by President Kennedy in 1962—to raise

"the levels of public health, educational, and welfare services so that

over a period of years they reach those obtaining in comparable areas

in Japan." You may remember that following the President's 1962

announcement, the Congress raised the Price Act ceiling from $6

million to its present level of $12 million. Actual appropriations

have reached this level in each of the last 2 fiscal years. In the development of the joint plan it became clear that it would be necessary

to request amendment of the Price Act to increase the authorization

if these goals were to be reached..

An increased contribution from the Government of Japan for the

economic development of the Ryukyus is part of the funding for this

plan. On the occasion of Prime Minister Ikeda's visit to President

Kennedy in June 1961, the President welcomed Japanese cooperation

in efforts to enhance the welfare and well-being of the inhabitants of

the Ryukyus, and arrangements for that purpose were worked out

with the Government of Japan. A "Japan-United States Consultative Committee on Okinawa" was established as a means of coordinating the economic aid provided by the Governments of Japan and

the United States, and within this framework Japan took steps to

increase its aid on projects agreed to by the United States.

During Prime Minister Sato's visit to the Ryukyus in August 1965

he announced the Japanese Government's desire to increase further

its aid to the Ryukyus. This announcement was followed by an

agreement within the Consultative Committee that the Japanese aid
4 RYUKYU ISLANDS

for Japanese fiscal year. 1966, which begins on April 1, 1966, would

amount to $16.1 million, an increase of $8.2 million over the $7.9

million made available by the Government of Japan in the previous

year. Our own budget proposes to increase U.S. aid from $12 to

$17.3 million in fiscal year 1967. In considering the amounts of aid

required in support of the long-range plan over succeeding years,

gradual increases have been projected in both the Japanese and

United States contributions. The amounts required on the U.S.

side may reach approximately $24.5 million by fiscal year 1971.

In summary, passage of the proposed legislation is needed to support

U.S. interests and to enable the United States to discharge its responsibilities to the Ryukyuan people. Accordingly, on behalf of the

Department of Defense, I urge your approval of H.R. 12617, and I

can assure you that the Department of State similarly endorses this

action.

This concludes my prepared statement. If you have no questions,

I suggest now that you hear from the High Commissioner, General

Watson, who is prepared to testify concerning the details of the need

for, and proposed uses of, the increased authorization and whom I

am privileged to introduce at this time.

Chairman RUSSELL. Before we hear from General Watson, the

committee may have a few questions, Mr. Holt.

Mr. HOLT. Yes, sir.

Chairman RUSSELL. I notice you state that the Ryukyuans are

Japanese. I assume you mean that from the standpoint of the same

nationality. They are not the same ethnic group as the Japanese,

are they?

Mr. HOLT. By and large, I believe so, Senator. And certainly they

have been Japanese nationals and culturally Japanese for quite a long

time. Mr. Sneider, from the State Department, of the Japanese desk,

may be a little more familiar with that than I am.

Mr. SNEIDER. Mr. Chairman, the Ryukyuans are ethnically homogeneous and almost of the same stock as the Japanese. The first

inhabitants of the Ryukyus probably were of a primitive Caucasian

stock similar to the people on Hokkaido. There has been some

intermingling with other Malayan people and then some Japanese

stock. Probably the most striking difference between the Ryukyuans

and other Japanese appears to stem from the greater Ainu element

present in the modern Ryukyuans.

Chairman RUSSELL. The reason I asked the question is I happened

to have a vague recollection in the back of my mind that during World

War II when we decided to invade Okinawa, one of the sheets I saw

on justifications stated that the Ryukyuans were not members of

the same identical ethnic group as the Japanese and I am surprised

now to find that that was in error. I know I read something like

_that during World War II.

Senator THURMOND. That is what I was told.

Chairman RUSSELL. But the State Department has changed its

mind on that, as has the Department of Defense since the war. I

am quite sure I recall reading it, before we made the invasion.

Senator THURMOND. Mr. Chairman, on that same point, I visited

Okinawa several years ago, and we were told there by our officials

that they were not Japanese.

Chairman RUSSELL. Of course, there are Japanese nationals there.

It was stated that they had not been recipients of the same benefits
RYUKYU ISLANDS 5

from the Japanese Government as the other islands, that they didn't

have as much money to spend on them.

How many people live on Okinawa, on the islands that we are using

for bases?

Mr. HOLT. I recollect from the figures of about a year ago, the

total for the Ryukyus is 933,000. Okinawa itself has a population

of 783,040 as of June 1965.

Chairman RUSSELL. I assume that the U.S. Government is the

principal employer on the island.

Mr. HOLT. The largest single employer I believe. My recollection

is about 53,000 employees, which amounts to about 12 percent of the

total work force.

Chairman RUSSELL. Twelve percent of the population?

Mr. HOLT. Twelve percent of the employed workers.

Chairman RUSSELL. What do the others do, principally?

Mr. HOLT. Agriculture, I believe, has the largest single employment. There is some commercial activity, but the bulk of the workers

are engaged in agriculture. The principal crops are sugarcane, I

believe, and especially in recent years, pineapples have become quite

important.

Chairman RUSSELL. The Ryukyuans have a local government, do

they not, an assembly of some kind and a local government?

Mr. HOLT. They do. The government of the Ryukyu Islands has

executive, legislative, and judicial branches. The legislature is

elected; I believe it is 31 members now elected on a district basis,

similar to American legislature. The executive department is headed

by a chief executive who is now appointed or elected by the legislature

itself. Until last winter he was appointed by the High Commissioner,

but he is now elected by the legislature.

General Watson points out to me that it is 32 members of the

legislature, rather than 31.

Chairman RUSSELL. What is the principal source of taxation for

the local government?

Mr. HOLT. In round figures, fiscal 1967 income taxes will amount

to approximately $30 million, excise taxes about $21.5 million, and

miscellaneous receipts of $2 million. So income taxes are substantially

the largest source of the government of the Ryukyu Islands funds.

Chairman RUSSELL. This came to my desk yesterday—I am one

of the few Senators, I suppose, to look through "junk" mail—a

publication of the New York Times on the Okinawa occupation. I

haven't read all of it but I did look at the headlines. It says here,

"The U.S. presence is key to Okinawan economy and departure of

some troops to Vietnam has caused recession in business." That

has a familiar ring. We have had that from many communities in

the States, from Hawaii, all the way to Florida and Georgia.

Moving troops out has had an impact on the economy. I am not

concerned about the amount that is involved here. I am interested

in the general philosophy of these different bills that affect the areas

where American troops are in occupation. I want us to do our full

share.

Of course, Japan itself now has a very booming economy. The

Japanese people are probably the finest workers in the world. They

object to working less than any people I know anything about in the

world anywhere. They are very industrious, and they have a booming
6 RYUKYU ISLANDS

economy, and some of it as a result of the fact that they have not

had to maintain a very large military establishment over the last

several years, so it hasn't been an unmitigated evil to have all these

American forces there in the Ryukyus. It has assured the protection

of Japan from any aggression from any area.

I was wondering why it was felt necessary to keep up with everything

that the Japanese did for the Ryukyuans, if they were, in truth,

Japanese. These bills heretofore have been presented to us on the

grounds that the Japanese were doing more for the Ryukyuans, or for

their brothers, blood brothers in the Ryukyus

'

than we were doing,

and, therefore, we had to increase it. I don't like that philosophy.

If you apply it all over the world it saddles us with enormous responsibilities.

Is that not one of the main reasons in support of this legislation?

Mr. HOLT. It is true, Senator, that the Japanese are in the current

year taking a larger share in assisting the development of the Ryukyus

than they have heretofore, but the real basis of this request is the independent justification of the need for the economic development of the

area in a healthy way, and the responsibility of the United States to

take the laboring oar in that as long as we retain the administration of

the region.

We do certainly expect considerably increased Japanese participation in this over the next few years.

Chairman RUSSELL. Do we have some kind of joint commission,

board, or committee of the Ryukyuan government, the Japanese

Government, and our Government, or are all these appropriations

turned over to the local government?

Mr. HOLT. There is a consultative committee between our Embassy

in Japan and the Japanese, set up in 1964 for the general consideration

of these joint assistance programs. Under them works the technical

committee which also has representation, not only from the Japanese

and the United States, but from the local government for working

out the implementation of the details of this assistance.

Then there is also a branch office in the government of the Ryukyu

Islands, with the assistance of our administration, to plan out the

budgeting of this program over the next several years.

Chairman RUSSELL. I think perhaps the committee had better

go into executive session to continue this discussion, but we will put

in the record at this point the opening statement of General Watson.

STATEMENT OF LT. GEN. ALBERT WATSON II, HIGH

COMMISSIONER OF THE RYUKYU ISLANDS

General WATSON. Mr. Chairman, gentlemen, it is a pleasure to

appear before you in support of the bill, H.R. 12617, which would increase the aid authorization to the Ryukyu Islands in the Price Act

from $12 million to $25 million. This proposed new ceiling is the

same as that which was proposed in 1962. The 1962 proposal was

based upon a report of an interdepartmental task force dispatched to

the Ryukyus by President Kennedy in September 1961 to review

economic and social problems. The current request is based upon

conditions some 5 years later.

The United States is responsible for promoting the welfare and wellbeing of the Ryukyuans. We have made considerable progress in this

respect over the past year. Economic growth, increases in national
RYUKYU ISLANDS 7

income, and improvement in the general standard of living have continued at a high level. The political situation, which was somewhat

agitated by the attempted resignation of the GM chief executive

when I first arrived in Okinawa, has become relatively stable. It is an

uneasy stability, and must be recognized as such, since for 20 years our

tenure in the islands has been indeterminate, with the ultimate goal

of returning the islands and the people to their status as a prefecture

of Japan.

The past year has seen an increase of threats and tensions in Asia.

This is caused primarily by the situation in Vietnam. The Okinawa

military base is vitally important in the defense of the United States,

Japan, and our other allies in the western Pacific. This was demonstrated during the past year when we were able rapidly to redeploy

troops and supplies from Okinawa to Vietnam. Our unilateral

flexibility of decision and movement lies in the exclusive administrative rights held by the United States under article 3 of the Treaty of

Peace with Japan. The continuation of this unilateral flexibility is

essential.

Now, I believe it would be well to include a few pertinent historic

facts. Prior to World War II, the Ryukyu Islands constituted 1 of

47 prefectures of Japan, the Okinawa prefecture. After the war,

the United States alone occupied the islands As a territory separate

and distinct from Japan. The occupation of Japan proper was

nominally under authority of the allied powers.

In 1952, the treaty of peace with Japan provided for the administrative separation of the Ryukyus, and in article 3 stated that "the

United States will have the right to exercise all and any powers of

administration, legislation, and jurisdiction over the territory and

inhabitants of these islands." Since then, the United States has

remained in the islands as the sole administrative authority, and has

built its vital military support base which, as stated by the President

in 1962 * * * "help us assure our allies in the great arc from Japan

through southeast Asia not only of our willingness but also of our

ability to come to their assistance in case of need."

In the peace treaty, Japan did not renounce all right, title, and

claim to the Ryukyus, as she did to Korea and Formosa. Since 1951,

the United States has recognized that Japan has "residual sovereignty"

over the islands, a term first used by former Secretary of State Dulles

in describing the relationship of the islands to Japan.

The Congress, when it enacted the Price Act in July 1960, recognized

that every effort should be made to improve the well-being of the

inhabitants during such time as the United States continues to retain

authority over the islands.

Following the recommendations of the aforementioned interdepartmental task force, President Kennedy in March 1962 stated in part

that—

The report of the Task Force examines in detail the problem of reconciling the

military imperative for continued United States administration with the desires

of the Ryukyuan people to assert their identity as Japanese, to obtain the economic

and social welfare benefits available in Japan, and to have a greater voice in the

management of their own affairs. The report has also considered in the same

context the desire of the Japanese people to maintain close contact with their

countrymen in the Ryukyus.

I recognize the Ryukyus to be a part of the Japanese homeland and look forward

to the day when the security interests of the Free World will permit their restoration to full Japanese sovereignty. In the meantime we face a situation which
8 RYUKYU ISLANDS

must be met in a spirit of forbearance and mutual understanding by all concerned.

I have directed that a number of specific actions be taken to give expression to

this spirit by the United States, to discharge more effectively our responsibilities

toward the people of the Ryukyus, and to minimize the stresses that will accompany the anticipated eventual restoration of the Ryukyu Islands to Japanese

administration. These actions consist of * * * "and I quote the two pertinent

ones * * *

(I) Preparing for submission to the Congress plans for the support of new

programs in the Ryukyus to raise the levels of compensation for Ryukyuan

employees of the U.S. Forces and the Government of the Ryukyu Islands, and the

levels of public health, educational and welfare services so that over a period of

years they reach those obtaining in comparable areas in Japan * * *.

(2) Entering into discussions with the Government of Japan with a view to

working out precise arrangements to implement a cooperative relationship between

the United States and Japan in providing assistance to promote the welfare and,

well-being of the inhabitants of the Ryukyu Islands and their economic development * * *.

It was at this point that the President in 1962 requested the Congress

to raise the Price Act authorization to $25 million. Congress authorized only $12 million in amending Public Law 86-629 in 1962.

Continuing with the historical background, in January 1965,

President Johnson and Prime Minister Sato met in Washington to

exchange views. The communique issued after the meetings stated

in part:

The President and the Prime Minister recognized the importance of United

States military installations on the Ryukyu and Bonin Islands for the security of

the Far East. The Prime Minister expressed the desire that, as soon as feasible,

the administrative control over these islands will be restored to Japan and also

a deep interest in the expansion of the autonomy of the inhabitants of the Ryukyus

and in further promoting their welfare. Appreciating the desire of the Government and people of Japan for the restoration of administration to Japan, the

President stated that he looks forward to the day when the security interest of

the Free World in the Far East will permit the realization of this desire They

confirmed that the United States and Japan should continue substantial economic

assistance to the Ryukyu Islands in order to advance further the welfare and wellbeing of the inhabitants of these islands * * *.

Over the past 18 months, additional authority and powers have been

granted to the local government. With this growth in autonomy the

local government has become more effective and responsible. A

signal step forward on the road to increased autonomy occurred on

the 20th of December 1965, when the President signed Executive

Order 11263. Now the Ryukyuan chief executive is elected by a

majority of the Ryukyuan legislative body. This replaced nomination by the legislature and appointment by the High Commissioner.

Another important recent accomplishment has been the joint

development by the government of the Ryukyu Islands and the U.S.

civil administration of a formal long-range planning system and a

long-range plan. This was done to insure that long-range goals and

objectives were identified and relative priorities were established between programs to provide the optimum application of available

resources. The first phase of the plan was completed on March 18,

1965. Since then the Ryukyuan government and the U.S. civil

administration have continued to identify those program elements that

need acceleration to achieve the U.S. goals for the Ryukyus and meet

the reasonable desires of the inhabitants. The goals of the long-range

plan are derived from the U.S. policy set forth in the Price Act and in

Executive Order 10713, and from the goals stated in the White House

statement of March 19, 1962. The goals of the plan are to insure

that—
RYUKYU ISLANDS 9

(1) The public sector contributes all it can to optimum economic

development and promotes cultural advancement; and

(2) The levels of public health, educational, and welfare services

advance toward levels obtaining in comparable areas of Japan

and reach them, to the extent possible, by the end of fiscal year

1971.

Analyses of the education, social welfare, and public health programs

were completed in the summer of 1965. The results are summarized

as set forth in the fact paper and in tables I and II which are attached

to my statement. I recommend that these be inserted in the record.

Table I compares the standard of living in the Ryukyus with the

12Ajapanese prefectures located nearest to the Ryukyus. These

comparisons show that the Ryukyus ranked ahead of Kagoshima and

behind the other 11 prefectures in terms of per capita income, disposable income, and consumption expenditures for fiscal year 1962, the

latest year for which comparable data are available.

Table II addresses directly the comparison between the Ryukyus

and Japan in the areas of health, education, and welfare. The data

in this table are for fiscal years 1964 and 1965. A few concrete comparisons will serve to indicate the size and nature of the gap we have

undertaken to close.

In the health field, the prevailing levels in the Ryukyus range from

30 to 48 percent of those in Japan. The best showing is in hospital

beds per 100,000 population. In Japan there are 826; in the Ryukyus

only 396, or 48 percent of those in Japan. The Japanese have 1

doctor per 898 population; the Ryukyus 1 doctor per 2,444, 37 percent

of the Japanese figure. As a result of heavy casualties in World

War II, the Ryukyuan population is comparatively young. That is

the reason why the Ryukyuan death rate is lower than that of other

Japanese, despite the poor showing in the aforementioned health

statistics.

Now a look at education. In spite of the need to catch up, per

capita school expenditures in the Ryukyus lag behind those in Japan

by 25 to 60 percent. Notice that the Ryukyus compare unfavorably

also in pupils per classroom. School building area per pupil in the

Ryukyus ranges from 52 to 62 percent of that in Japan.

Social insurance is complete in Japan. The Ryukyuan enjoys

protection in only two of seven major social insurance protections

available to the Japanese—unemployment insurance and workmen's

accident compensation.

These comparisons make amply clear just how far we have to go in

the Ryukyus. This is no 1-year job. It will require continuing

effort and increasing levels of assistance. We have to work against

several limitations in our effort to close the gap. For instance, we

cannot expect to train the needed doctors, nurses, and other medical

personnel in 1 or 2 years, when at the present time there is not even a

medical school in all of the Ryukyu Islands. Construction facilities,

too, represent a limitation. We can program in each year only a

portion of the needed annual increment of school and other public

works construction.

The long-range plan takes these limitations into consideration.

The result is a program for the next 5 years which will reduce the gap

to the minimum possible using the training and construction capabilities expected to be available in each year. In the education program,
10 RYUKYU ISLANDS

for example, the educational facilities cannot be raised to approved

standards by the end of fiscal year 1971. We program, therefore, to

obtain as many as possible of the regular and special classrooms and

other highest priority facilities by the end of the planning period. We

estimate that we need approximately 2,800 classrooms by the end of

fiscal year 1971 but thus far we have been able to program for only

1,830. We have been able to program about 50 percent of the short

fall in total educational facilities requirements.

In public health, our plan calls for increasing hospital beds by 4,200

during the period bringing the total to 7,900 beds. This will increase

the present ratio of 396 beds per 100,000 to about 790 per 100,000

which is almost equal to the present average in Japan of 826 per

100,000. However, there may not be enough doctors, nurses, and

other trained personnel to service that many beds. We will reduce

this program if future annual reviews of the long-range plan so indicate.

This brings us to a current overriding limitation—the $12 million

ceiling on U.S. aid. For the past 2 years, the entire $12 million authorized by Public Law 86-629 has been appropriated. While there

has been a great increase in the size of the Japanese contribution from

$5.2 million in 1965 to $16.1 million for fiscal year 1967, these amounts

are not sufficient to permit minimum satisfactory progress toward

established goals embodied in our present program. We estimate

that an additional $5.3 million in U.S. economic assistance, bringing

the total to $17.3 million is required in fiscal year 1967. Table III

appended to this statement provides a tabulation by budget activities

of the proposed Japanese and United States aid budgets for fiscal

year 1966 and fiscal year 1967.

Last year, in view of the foregoing, we proposed for fiscal year 1967

that the United States and Japan provide more needed financial

assistance to the government of the Ryukyu Islands, particularly

for education, public health, and welfare services. Since then, two

significant actions have occurred.

The first action was on September 20, 1965, at a meeting of the

United States-Japan Consultative Committee in Tokyo when the

Japanese Government was invited to assist in raising the levels of

public health, education, and welfare to those obtaining in comparable

areas of Japan by the end of fiscal year 1971, and to continue to contribute to the economic development of the islands.

The second is the introduction of the bill before you to raise the

authorization for U.S. aid in order that the U.S. contribution may be

increased to meet the situation today.

With the increase in its own revenues and those from the United

States and Japanese Governments anticipated in fiscal year 1967, the

budget of the government of the Ryukyu Islands is expected to be

about $87 million.

The funds that are released by the increased United States and

Japanese funding will be utilized by the government of the Ryukyu

Islands for a number of important activities. These include, among

others, meeting the increased costs for the operation and maintenance

of the expanding school system, and for the government's increased

contributions to the expanded social insurance program; financing

additional much needed economic and public works projects; and increasing its financial assistance to the municipal governments. Also,

the released funds will assist the government of the Ryukyu Islands in
RYUKYU ISLANDS

meeting the costs of central government functions which it must

finance while separated from Japan, without neglecting other important activities.

It is significant that it is impossible for us to achieve many of the

goals for the Ryukyus by the end of fiscal year 1971. There is a limit

to the amount of funds that can be assimilated by the Ryukyuan

economy and administered by the Ryukyuan government. This is a

principal reason why our annual review and updating of the long-range

plan adds a new year and drops the completed year. In this manner,

we reassess our requirements versus actual achievements, and readjust our priorities and the phasing of our programs.

ECONOMIC INDICATIONS FROM LONG-RANGE PLAN

At this point, I would like to insert in the record and discuss chart

A which shows gross national product and national income. This

information is taken from the long-range plan.

The gross national product in fiscal year 1965 was $369.1 million

and is projected to reach $707.6 million in fiscal year 1971 in terms of

constant fiscal year 1965 dollars. The annual average rate of growth

would be 11.3 percent compared to 13.1 percent during the period

fiscal years 1960-65. This growth rate is one of the best in the world,

but it is not indicative of the gap between the Ryukyus and Japan

in public health, education, and welfare.

National income is anticipated to rise from $340 million in fiscal

year 1965 to $641 million in fiscal year 1971, an average annual rate

of growth of 11.2 percent.

Per capita income is expected to increase from $364 in fiscal year

1965 to $650 in fiscal year 1971, also in constant fiscal year 1965

dollars. This should put the Ryukyus ahead of most of the lower

prefectures of Japan since today the Ryukyus are equal to or slightly

lower than a number of prefectures.

We have difficulty in making valid and timely economic comparisons

with Japanese prefectures for three primary reasons. First, prefectural statistics become available about 3 years after those of Japan's

Central Government. Second, the Ryukyu's statistical system differs

from the prefectural system. The Ryukyuan system is designed as a

national government and has no interprefectural duplications. Third,

there are no precisely comparable prefectures to the Ryukyus as will

be shown in these next two charts.

Chart B shows commodity imports and exports, actual through

fiscal year 1965, and the long-range plan projections through fiscal

year 1971. The large inbalance in trade results from the lack of

raw materials in the Ryukyus. The main exports are sugar and pineapple to Japan. Japan subsidizes the high cost of sugar production

by paying much higher prices than she pays to other countries which

are competitive on the world market. In the long-range plan,

government measures, such as subsidies, are programed to assist

private industry in increasing the ratio of exports to imports from 38

percent in fiscal year 1965 to 40 percent in fiscal year 1971. Although

chart B indicates a heavy deficit in the balance of payments, this is

not the case, as shown on chart C.

Receipts and payments are about equal because the spending in

the economy by the military base and U.S. personnel makes up the
12 RYUKYU IStANDS

large imbalance in trade. There is no prefecture in Japan where the

economy depends for the most part upon military spending. Our

"comparable area" comparisons are derived from the lowest income

prefectures because Okinawa was the lowest prior to World War II.

The rapidly expanding aid program of the Japanese Government has

changed the character and complexion of our U.S. budget request.

We seek to develop the most effective application of United States and

Japanese aid so as to bolster the three social programs (public health,

education, and social welfare) in which the Ryukyus are substantially

behind Japan.

At the same time we seek to insure that the activities and individual items funded are of highest priority to the local government.

Our principal programing job in the Ryukyu Islands is to insure that

the government develops an annual program which is best suited

to achieving the objectives of the long-range plan. With many unfulfilled requirements remaining in the developing society of the islands, we realize that the local government in its eagerness must not

program beyond its execution capabilities and the ability of the

economy to absorb the total government program. For fiscal year

1967, this limit is estimated to be about $87 million.

Our current long-range plan is based upon our judgment that the

Ryukyuan economy vitally needs and can absorb, and the GRI can

administer, increases in budget planning levels averaging 13.3 percent for each year of the planning period, fiscal year 1967 through

fiscal year 1971. If this proves true, the GRI budget will increase to

$163 million by fiscal year 1971. This will enable a substantial reduction of the gaps between the Ryukyus and Japan in the levels of

public health, education, and welfare.

Mr. Chairman, in order that the United States can assist the people

of the Ryukyus in more rapidly achieving a standard of living similar

to that in comparable areas of Japan, favorable action by the Armed

Services Committee is respectfully requested. This concludes my

opening statement.

FACT PAPER

STANDARD OF LIVING: RYUKYUS VERSUS JAPAN

Past history.—Before World War II, Okinawa was the poorest prefecture of

Japan. Per capita income of Okinawa averaged about $25 per year during the

1934-1936 years; whereas in mainland Japan, annual per capita income averaged

about $60 during the same period. However, despite the poor economic state of

prewar Okinawa, the GOJ central government took measures to provide the Okinawans with schools, hospitals and welfare facilities which were adequate for that

time and comparable to those in other prefectures in Japan.

Current plans.—Currently Okinawa still ranks with the poorer prefectures of

Japan (1962) as indicated in table I attached. This table has five sections.

Sections I, II, and III compare the per capita national income, disposable inincome and consumption expenditures in the Ryukyus with the average in all

Japan, and with twelve prefectures that are physically closest to Okinawa. FY

1962 was the latest year available when a USCAR and a GRI representative personally visited these prefectures last fall to discuss conditions and obtain factual

information. As can be seen, the Ryukyus rank ahead of Kagoshima and behind

the other eleven prefectures.

Section IV of the table compares the same economic factors in the Ryukyus

with the Japanese national average for which we do have statistics through

FY 1965.

Section V compares FY 1965 price levels against the Tokyo consumer price

index which is 100. We have the figures for the 12 prefectures in this case. In

FY 65, prices in the Ryukyus were slightly higher than in Japan. However,
RYUKYU ISLANDS 13

the price index in Japan has risen rapidly in some areas in FY 66 and we estimate that Ryukyuan prices are now equal to or less than Japan.

In Japan and the Ryukyus, another important measure is the so-called fiscal

level of the budgets of the individual prefectures. The Japanese Government in

a recent Consultative Committee meeting in Tokyo, provided us with a FY 63

comparison with seven selected (by GOJ) prefectures. The average prefecture

spent $86 per person which compares with $59 per person in the Ryukyus including central government functions that would be borne by Japan if Okinawa,

were a prefecture. Excluding those central government function costs, the average in the Ryukyus is $45 per person, or 52.3 percent of the average in the seven

prefectures.

Concerning the three program areas of public health, education, and welfare,

where the gaps between the progress made in Japan and that in the Ryukyus

have caused serious concern in the Governments of the U. S., Japan and the

Ryukyu Islands, table II, attached hereto, has certain key indicators which

illustrate the differences.

Future plans.—As pointed out in the opening statement, one of the primary

goals of the long range plan is to raise the levels of public health, educational,

and welfare services to the extent possible by FY 1971 to levels obtained in

comparable areas of Japan.
14 RYUKYU ISLANDS

TABLE 1.-Comparison of income and cost of living, Ryukyus and Japanese

prefectures

[In dollars]

I. National income

per capita 1

II. Disposable income

per capita 2

III. Consumption expenditure per capita 3

Fiscal

year

1960

Fiscal

year

1961

Fiscal

year

1962

Fiscal

year

1960

Fiscal

year

1961

Fiscal

year

1962

Fiscal

year

1960

Fiscal

year

1961

Fiscal

year

1962

All Japan 301 357 419 253 289 337 206 229 263

1. Tokyo 584 697 802 448 512 596 315 366 425

2. Tokushima- -------- _ _ 227 284 323 223 275 310 168 200 225

3. Kagawa 280 331 384 265 311 363 190 196 232

4. Ehime 260 308 354 247 285 328 182 209 242

5. Kochi 249 295 338 242 285 330 169 192 232

6. Fukuoka 337 393 451 306 340 396 219 241 273

7. Saga 235 266 306 227 258 301 186 203 234

8. Nagasaki 242 272 303 227 254 294 171 189 213

9. Kumamoto 213 248 292 206 239 283 162 176 196

10. Oita 234 259 301 226 249 284 163 183 220

11. Miyazaki 217 244 ' 275 212 237 264 172 187 204

12. Kagoshima 178 203 240 177 201 234 155 173 193

Ryukyu Islands 202 237 261 199 236 255 158 172 194

IV. Comparison of (Ryukyu Islands with Japanese averages)

Fiscal

year

1960

Fiscal

year

1961

Fiscal

year

1962

Fiscal

year

1963

Fiscal

year

1964

Fiscal

year

1965

National income per capita: 1

All Japan 301 357 419 460 528 587

Ryukyu Islands 202 237 261 299 322 364

Disposable income per capita: 2

All Japan 253 289 337 477 431 488

Ryukyu Islands 199 236 255 285 304 344

Consumption expenditure per capita: 3

All Japan 206 229 263 299 342 384

Ryukyu Islands 158 172 194 215 237 261

[Tokyo ---IOC)]

V. Comparison of price levels:

All Japan 

Fiscal

year

1965

95.1

1. Tokyo 100. 0

2. Tokushima 98. 1

3. Kagawa 97. 5

4. Ehime 96. 4

5. Kochi 97. 2

6. Fukuoka 98.4

7. Saga 96.2

8. Nagasaki 97.5

9. Oita 95. 0

10. Kumamoto 97. 0

11. Miyazaki 93.1

12. Kagoshima 96. 1

Ryukyu Islands 100.9

1 Aggregate earnings of all factors of production.

2 Disposable income is national income less taxes;

3 Consumption expenditures are national income less savings.
RYUKYTJ ISLANDS 15

TABLE H.-Comparative data on health, education, and welfare for the Ryukyu

Islands and Japan

Ryukyus,

fiscal year

1965

All Japan,

fiscal year

1964

I. Health:

Doctors:

Number 383 106,512

Population served per doctor 2, 444 898

Dentists:

Number 103 34,517

Population served per dentist 9, 087 2, 772

Nurses (clinical and public health):

Number 846 218, 021

Population served per nurse 1,106 439

Hospital beds:

Total beds 3,704 794,434

Number per 100,000 population 396 826

TB beds 795 235, 150

Number per 100,000 population 85 245

NP beds 475 136,387

Number per 100,000 population 51 142

Birth rate per 1,000 population 21.5 17.3

Life expectancy (years):

Male (1960) 68. 0 (1962) 66.2

Female (1960) 74. 7 (1962) 71. 2

Death rate per 1,000 population 5.3 6.9

II. Education:

1. Per capita school expenditures (1964):

Kindergarten $24.25 $61.21

Elementary school $45.84 $96.63

Junior high school $68.12 $99.20

Special school $348.86 $748.21

Senior high school (day) $130.67 $180.69

Senior high school (night) $70.93 $150.02

2. Pupils per classroom (1964):

Elementary school 43.3 36.0

Junior high school 46.9 42.3

Senior high school (day) 43.5 NA

Senior high school (night) 38.8 NA

3. School building area per pupil (excluding gymnasium and auditorium):

School

Ryukyu Islands Japan,

fiscal year

1964

Fiscal year Fiscal year

1964 1966

Square meters Square meters Square meters

Primary 2.28 2.48 4.76

Junior high 2.25 2.71 4.38

Senior high 3.67 3.84 6.59

Ryukyus Japan

III. Welfare programs:

1. Social insurance:

(a) Public service personnel retirement annuity 

(b) Medical insurance program_ 

(e) Unemployment insurance 

(d) Workmen's accident compensation insurance 

(e) Workmen's annuity 

(f) Old-age and survivors (national pension) 

(g) GRI Employees' Mutual Aid Association 

2. Public assistance (daily life security):

Total (per family per month) 1 

Livelihood (food and clothing) 

Housing 

Educational 

July 1, 1966 

do 

In operation _ _ _ _

do 

Fiscal year 1967 _

Fiscal year 1968 _

Fiscal year 1971 _

In operation.

Do.

Do.

Do.

Do.

Do.

Do.

$27.28 $36.15

22. 79

4.17

.32

32. 97

2.67

. 51

1 Payments to Ryukyuan and Japanese households of similar economic status residing in towns and

villages. Amount based on household consisting of 5 members. Excludes surplus agricultural commodities (Public Law 480, title III program). Data for May 1965.
TABLE M.—Proposed United States-Japan aid program budgets, fiscal year 1967 (Japanese fiscal year 1966)

[In thousands]

U.S.

subproject

(1)

8731

8732

Fiscal year 1966 Fiscal year 1967

U.S. ARIA

Budget activity item Total Total

U.S. Japan external Under Increase Japan external

ARIA aid current under Total aid

authorize.,

tion

proposed

authorization

proposed

(2) (3) (4) (5) (6) (7) (8) (9) (10)

Reimbursement for Government services $1,200 $1, 200 $1, 200 $1, 200 $1, 200

1. Public safety 800 800 800 800 800

• 2. Public health and sanitation 400 400 400 400 400

Contribution to Government projects:

1. Education 2,955 $1, 082 4,037 4,235 $4, 175 8,410 $7, 697 16, 107

(a) Teachers salarieS 1, 000 1, 000 1, 000 4, 000 5, 000 5, 288 10, 288

(b) Construction 915 135 1,050 1, 800 1,800 1, 265 3, 065

(c) Equipment and supplies 720 802 1, 522 1, 085 1, 085 976 2, 061

(d) University of Ryukyu and other 320 145 465 350 175 525 168 693

2. Social welfare 395 395 560 560 1, 050 1, 610

(a) Capital, G RI retirement annuity 395 395 389 784

(b) Capital, medical insurance 165 165 167 332

(c) Other 395 395 494 494

3. Public health and medical 997 1, 050 2, 047 950 950 1, 701 2, 651

(a) Disease control 430 55 485 450 450 • 76 526

(b) Health and medical facilities and equipment 567 354 921 500 500 722 1, 222

(c) Treatment of patients 641 641 903 903

4. Public safety 125 75 200 50 50 50

flA.31.CIA:11 crNvrIsi 
5. Public works 

(a) Roads and bridges (excluding farm) 

(b) TV for Sakishima Islands 

(c) Sewer system 

(d) Other 

6. Economic development 

(a) Agricultural land development 

(b) Farm roads and retaining walls 

(c) Capital for CBC and Peoples Finance Corporation _ (d) Other 

8733 Transportation of commodities 

8734 Technical education and training 

8735 Technical cooperation 

Grand total 

4,958 1, 795 6,753 2,865 935 3,800

. ....... , . 

1,814 5,614

1,000

2, 835 

1,123

210

8

1,577

1,210

8 

2,8352,700

450

1,430 

985

550

385

1,000

1, 430 

1,370

205

604

1,005

1,205

604

1,430

2,375

225 2,868 3, 093 100 200 300 2,993 3, 293

225 232 457 100 200 • ' 300 250 550

529 529 571 571

1, 160 1, 160 - 1,389 1,389

947 947 783 783

5 5 5 5 5

790 250 1,040 985 985 287 1,272

745 449 1,194 1,050 1,050 572 1,622

12,000 7,964 19, 964 12,000 5,310 17,310 16,114 ' 33, 424
18

NILLIONS OF

DOLLARS

800

700

600

500

400

300

200

100

RYUKYU ISLANDS

CHART A

GROSS NATIONAL PRODUCT

IN CONSTANT DOLLARS AFTER FY*65

GROSS NATIONAL PRODUCT

707.6

/ •641.0

/

•

/

",•• / •

340

NATIONAL INCOME

TERTIARY INDUSTRIES

SECONDARY INDUSTRIES

PRIMARY INDUSTRIES

FR' 55 56 57 58 59 60 61 62 63 64 /\... 6, A 67 68 69 70 71/

ACTUAL PREL PROJECTED

MILLIONS OF

DOLLARS

400

300

200

100

CHART B

COMMODITY EXPORTS AND IMPORTS

IMPORTS

210.7

361.5

146.0

TRADEDE.F-1C- -r11 40%

79.4 ••••

38%

EXPORTS

FY 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71

ACTUAL PREL. PROJECTED
MILLION OF

DOLLARS

500

400

300

200

100

RYUKYU ISLANDS 19

CHART

FOREIGN RECEIPTS AND PAYMENTS

(EXCLUDING CAPITAL TRANSACTIONS)

PAYMENTS 

398•3

.e..:0• 84.4

e'•

238.4 #

k 230.9

\ RECEIPTS 

\FY55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 /

ACTUAL A

PROJECTED---`

(Whereupon at 10:48 a.m., the committee went into executive

session.)

0