Evening star., 1932-02-06
DOUBT # JAPAN
CAN FINANCE WAR
Foreign Experts Hold Eco
nomic Structure Would Give
Way in Few Weeks.
BY GLENN BABB.


TOXIC, February 6.-Japan's eco
nomic condition, seemingly as sound as
that Of any European nation, appar-
emily has withstood the pinch of the
country's military adventures in China.
Confident foreign authorities have
expressed doubt, however, whether
Japans economic structure could stand
the strain of either major conflict or
economic isolation more than a few
weeks, especially since in either case
the world money market probably would
be closed to her
There is even an appearance Of pros
perity on the surface at the moment
as a temporary result of the Seiyukai
party's return to office.
Buoyancy in the stock exchanges and
in The commodity markets was set back
during the past week, owing to the
international situation, making specu-
lators highly nervous. The general
price trend continued upward, however,
and losses resulting from the Anglo
American representations against the
military activities in Shanghai early in
the week were largely recovered.
People Support Nation.
What the operations in China are
costing Japan has been kept secret
One explanation Of this is the apparent
unanimity with which the people are
supporting the nations military policy
and the fact that the bill for the ad-
ventures in China in the form Of higher
taxes has not yet been presented to
the nation and is likely to be withheld
for several months.
Sound banking and efficient industry
are cited as the principal reasons for
confidence in Japans economic sound
ness, but disquieting factors are the
gloomy outlook for foreign trade and
the government inability to balance
the budget except by restort to loans.
Business circles have expressed
anxiety as to how foreign trade will
fare during 1882, which opened with
an alarming balance Of imports over
exports in January Of more than As
100000 yen (about $l5,750,0 900 at the
current rate of eXchange) as compared
with a small export balance in Jan
uary, 1881
Exports last month were a third less
than during January year ago. Gains
which the japanese hoped their de-
preciated currency would produce, were
more than offset by the almost total
obliteration Of Japan's great market in
China as a direct result of the military
activities there.
Sound Financial Basis.
The business world has asked how
long this must continue since it is evil
dent that Japan could not long with
stand an accumulation of such adverse
trade balances.
Conservative banking policies, which
the government has Stringently en-
forced, have given Japans economic
structure a sound financial basis in the
opinion Of experts. Lessons of the dis
astrouS Spring Of 1927, when a mora
torium was necessary, apparently en-
abled Japan to escape plague Of bank
failures
Japanese industry, moreover, Is be-
lieved to be on a more efficient basis
than ever Large cotton spinners said
they were able to continue operations
and pay dividends for at least two years,
even If the market in China their big
gest, remained tightly closed by boycott
or war.
The japanese currency deprecated
approximately 80 per cent after an en-
barge again was placed on gold. But
it was pointed out that the British
pound sterling suffered likewise and
that the ratio Of Japan's specie reserve
to the note issue was nearly 40 per cent,
despite the drainage caused by huge
shipments Of gold to the United States,
totaling $50. 900 yen in the last three
months Of 1881.
Few Unemployed.
A factor encouraging the imitation
boom was the confidence in business
circles that the Seiyukai party would
win in the national elections on Feb
ruary 20 Experts said there was no
indication that fluctuations in the
market could be traced to manipulation
on the part Of interests favoring the
minseito (opposition) party.
Compared to the unemployment
figures of the United States and Euro
pean nations, those Of Japan seem al
most insignificant. since they do not
exceed 100000. This is attributed to
the elasticity Of the family system IN
Japan which gives the nation its eco
nomic fabric.
Workers losing their jobs In the city
merely drift back to the farms from
which a majority of them came.
The trend to the farms, however. has
aggravated one of the most menacing
features of the national economy,
namely the agrarian problem, acute al
present because the bumper rice crop
of 1881 lowered the farmers income.
Farm troubles are chronic, particularly
disputes between tenant farmers, who
are in vast majority, and the land
owners