Evening star., 1938-06-02
TOXIC WAR COST
S5,0)O,O()D DAILY
Japanese Rationing Selves
SternIy to Pay for
ConuueSts.

-(Correspondence OF the
Associated Press)-Japan is rationing
herself with terrible sternness to pay
for the war with China
Pre-dmably the poorest of the
worlds "have-nots," the nation has
been blowing an estimated $5.090.o00
daily through her guns and rifles
since the incident" began, July 7,
1887.
Experts place the total expenditure
thus far in the neighborhood of
$4,000. 900, 900. -.-.
The people are paying high taxes.
They are using their savings to buy
government bonds. They are working
longer hours, wearing synthetic cloth
ing materials and foregoing even the
pitifully few luxuries they normally
enjoy.
A steady stream of sentiments
stimulation comes from the govern
ment to increase their natural will
ingness to do this.
The need for American dollars is
powerful factor in Japans precarious
financial structure.
Credit Purchases Limited.
In the United States, where she
buys most of her necessities, her pur-
chases on credit have been greatly re-
stricted. She is paying cash for most
of the airplanes, munitions, oil, cot
ton and machinery she gets, and to do
this she must buy dollars with her
yen.
At the same time she is meeting
the interest on S316,0oo,0o0 obtained
from American investors before the
war began by bonds sold on the Amer
lean market. They represent national,
municipal, government guaranteed
and privately guaranteed corporate
issues.
Adding a final touch to what ap-
pears to be a dark picture, Japan's
exports have shrunk by some 20 per
cent. and commodity prices have
risen.
Germany and Italy, Japan's anti
Communist" allies, are in no position
to help her with credits, because they
need cash just as badly as she does.
Nor is the rest of the world anxious
to give her raw materials or manu-
facturer goods on a pay-after- the war
basis.
Four Sides to Financial Picture.
There are four sides to the japanese
financial picture today-heavy inroads
on resources, greatly increased taxa
ton, restriction of imports to the
barest necessities and rigid control of
domestic finance.
Economically. Japan is shipwrecked
sailor in an open boat-but with a
fair-sized cask of water
The nation catches little rain
water in the form of gold production
and some export revenue. But mainly
it is living off its stores and will not
sight land until the China war ends.
Japan grew fat while others grew |
lean in the years from 1881 to 1884 |
which brought depression to the rest
of the world. With cheap labor and
cheap goods she flooded world mar
kets. The reserves accumulated in
those days are financing her war
today.
The empires gold production, op- |
Grating under full steam, is about |
s75, 100000 a year. From New Year |
day to April 81 this year she shipped |
abroad $33,5o0,oO0 in gold for cash
purchases drop in the bucket. A
whole years gold output would carry |
her only two weeks in the war costing |
s5,ooo.o00 day.
Tax Boost Average 10 Per Cent.
The average increase in taxes is |
elmost 10 per cent. Ordinarily Jap
anese taxpayers put S500,0o0,000 an
nually into the treasury, and on May
Is the finance ministry announced
that the natural increase" in revenue
had reached S43,500,000. There are
scares of new special taxes and in
come taxes have increased more than
10 per cent on an average.
Rigid import control started last Oc-
tober, when the ministry of commerce
and industry listed nearly TOO articles |
which could be imported only by spe- |
cial permission. Importers say such |
permission is almost impossible to OBJ
tain.
Inside Japan, money is controlled
down to the last yen. It passes around
in a small circle, from government to
industry particularly munitions) to
laborer and back again to government |
in the form of personal and corpor-
ate taxes and national bond issues.
The whole problem is to keep money |
from leaving the country, except for
absolute necessities that Japan lacks |
Foreign goods. such as movie films,
can't come into Japan except on a |
tiny quota basis.
Export control likewise applies to |
money. Foreign firms have large |
sums frozen in Japanese banks
money earned in Japan, but whose re-
s.aisciAHa "a Iax,ae eRH l..