Evening star., 1939-07-03
BY RELMAN NORM.

| Associated Press Foreign Correspondent.
TOXIC, July 3.-Indications are
multiplying that Japan is feeling
| increasingly the economic stresses of
two years of her war of conquest in
China, which started July 7, 1887.
For Japan as a nation, in her con-
facts with the outside world, nearly
every economic barometer is regis
terlng danger signals. Wealth with
which she can purchase sorely
needed supplies abroad is rapidly
diminishing.
But for most of the japanese
people, protected within carefully
guarded economic walls against
world tides of commerce and ex-
change, this picture of national
poverty presents a contradictory OBJ
verse of domestic boom.
Japan, the nation. must pinch
every penny, the individual Japanese
| is spending as he has not done for
years.
The economic picture inside Japan
presents these details:
Food-The government is ration
ing milk, butter, eggs and other es-
sentials -. a California lemon costs
80 cents and is not to be had even
at that price -. The average of food
costs has risen l3 per cent in year,
% per cent since the war started.
Materials-Old razor blades and
used pen-points are being melted
down for munitions Thousands
OF iron man-hole covers have been
| replaced by wooden ones Cotton
and woolen cloth have disappeared
from the retail market The
attempt to substitute staple fiber "a
vegetable thread has been unsuc-
ceSSful.
Business-Banks have been or
dered to reduce the interest rates on
loans to small business men
Price control, without control of
wages, has forced thousands of the
latter into bankruptcy .. A special
agency has been organized to help
them transfer to new fields.
Finance-The yen recently sank
to an all-time low in Shanghai, the
nearest foreign exchange market
compulsory registration of gold ar
tlcles is beginning . corporations
are issuing government baby bonds"
instead of cash, for bonuses =.
the finance minister recently ex-
pressed disappointment over the
1888 gold-mining yield.
Currency Reservoir Low.
Two salient facts emerge from all
this.
One is that Japan's reservoir of
foreign currency has finally fallen
SO low that the most drastic meth
ods have been adopted to keep the
flow going, at all. The other is that
a condition akin to imitation has
developed inside Japan.
The japanese problem, in war
time, is fundamental.
The nation is poor in vital re-
sources, oil, iron, coal, cotton, wool,
pulp, chemicals. 1t must buy these
things. For nearly two years now,
it has been buying them, in huge
quantities, on terms that are al
most entirely cash and carry. Busi-
nesSmen in every nation have de-
manded, and received, cash before
the ship sailed.
Japan met the problem of paying
cash in three ways-with gold re-
serves accumulated in New York
and London during peace time,
through domestic production of
gold, and through export trade
whereby some foreign exchange was
obtained in payment for japanese
finished goods. When the fiscal year
ended March 81, despite the strict
est secrecy, it became known that
financial circles were in a near
panic over the shortage of foreign
currency and gold
No figures were published. Nor
is anything known, accurately, about
the amount of gold procured in
Korean, Formosan and japanese
mines in 1898. Presumably, the an
nual yield is about $55 100000. In
view of Finance Minister Sotaro
1shlWata's statement voicing disap-
polntment over the output, financial
circles were inclined to doubt that
this figure was reached last year
Gold Reports Ordered.
Two new government edicts indi-
cate efforts to replenish the gold
holdings. The finance ministry re-
Gently published the following Or
dinance:
Persons who possess such manu-
factured articles using gold as are
enumerated hereunder - shall
present a report on the amount of
holdings to the minister of finance
not later than July S:
Rings. hand ornaments and other
personal ornaments, watch cases.
spectacle rims and other personal
equipment, tobacco pipes, cigarette
cases. cups, pots and other articles
for use in drinking and eating.
candlesticks, incense burners, paper
weights, pen-knives, paper knives,
seals and other household recep-
tacles."
Jewelry guilds have been "re-
quested" not to use gold in any
manufacture. Stores, by the same
request, will not display any gold
articles.
1t was officially announced that a
ration system applying to butter,
milk, eggs, tea, sugar and other food