Evening star., 1941-02-01
Economic Pressure
From u. :. Is Felt
KeenIyin Japan
Production Of Munitions
And Goods Far Below
National Needs
(Fourth of Series.J
By a, T. STEELE,

TOXIC (By Clipper when
Japanese leaders can be coaxed
down out of the clouds to the bed
rock Of cold reality, they will often
confess that their most serious
internal problem is the failure OF
Japanese industry to produce suf-
ficient materials to give backbone
to their fantastic dreams of en-
pire.
How can Japan hope to exploit
It's territorial grab in Manchuria,
China and Indo-China without ma
terials? 1t cannot. How can the
Japanese Army hope to wage a sue
cessful war against the United
States without a steady flow of
both raw and manufactured ma
terials? 1t cannot.
Japan's internal economy is in
such a deplorable state that only
baling wire methods are holding
1t together. National production
of munitions and goods is far be-
hind national needs-so far behind,
that huge sums appropriated for
expenditure last year are still un-
spent because the vital materials
for which they were earmarked
were simply unobtainable at any
price.
Many Causes for Situation.
There are many causes for this
sorry state of affairs. High on the
list is American economic pressure,
which is being felt more keenly
than most Japanese are willing to
admit. But there are other rea-
sons, among them the cutting off
of European sources of supply, the
dwindling efficiency of Japanese
industry, the shortage of labor and,
lastly, government meddling through
trade restrictions and other con-
troll measures.
On none of my previous visits
TO Japan have I found Japanese
business men in as depressed and
as discontented a mood as now.
For a few individuals, the China
adventure has been bonanza, for
business as whole it has been a
terrific drain and strain. The ex-
pected deluge of raw materials from
the continent has failed to material
lie in the anticipated quantities,
and in some essentials, such as
iron and cotton, has actually fallen
far below prewar figures. Shortage
of materials has forced hundreds
of factories to close down or merge
with their competitors. The rise
Of anti-Japanese feeling abroad has
shut off many foreign markets.
Inf1ationary Tendencies Continue.
Meanwhile, inf1ationary tend
encies continue in Japan, despite
semi-successful efforts to control
prices. Economic crimes are on
the increase. The budget this year
will be the largest in Japans his
tory-and this means bigger issues
of red-ink bonds The country's
capacity to absorb these bonds has
lately shown an alarming decrease.
Trade balances with countries out
side the yen bloc remain unfavor-
able despite drastic import and ex-
port control. So there is a steady
drain on Japan's gold reserves,
which must be at pretty low point.
The currency issue, on the other
hand, is more than double that of
1887 and is still climbing-another
unhealthy sign The army has by
now learned that it is one thing to
print new bank notes, it is another
to convert them into munitions.
And on top of all this there are
restrictions uncounted, affecting
the life of every Japanese subject
restrictions on what he can eat,
what he can wear, how he can play,
what he can say, what he can read,
where he can 60, how much he can
earn. Quite number of daily ne
cessities are now rationed, and
luxuries are practically taboo. 1t
must be said. though, that your
average Japanese is still not as re-
stricted In his material wants as,
say, the citizen of wartime Ger
many.
Production Tagging.
Now, the leaders of Japan would
view these economic danger signs,
and the national sacrifices they en-
tail, with comparative equanimity
were they only bringing the desired
results. Production is not increas-
ing fast enough. Japanese industry,
and the factories and fields of other
countries of the yen bloc, still fail
to produce flow of manufactured
and raw materials sufficient to meet
Japan's tremendously expanding vi
tai needs. This Is one of Japan's
biggest worries.
Obviously, the ultimate RESPONSE
bility for Japan'S economic mess
rests with the Japanese Army and
its blunders in China. But the
army, declining to take the blame,
lays it all onto the evils" of liberal
capitalism and the oppression from
the United States. The army says
the only way out is more state con-
troll of business and industry. They
argue that If Hitler made totali-
tarianism work why shouldn't ia
pan?
But the captains of industry don't
agree. They accept state socialism
in principle, but they object to
the extreme principles of the army's
program. 1t looks more to them like
Communism than Hitlerism, and
they are saying so to the govern
ment's face. They oppose putting
their businesses in the hands of
government amateurs" They are
asking the government to lay less
emphasis on newfangled ideas and
put more stress on the urgent ma
tional problem of stepping up pro-
duction.
1t is a bit ironic that the Japa-
nese government is able to utilize
the American menace" as its most
persuasive talking point in whipping
capitalists and the general public
into line on its drastic control pro-
gram. Japanese officials and Japa-
nese newspapers are continually tell
ing the people that If the Japanese
nation is successfully to survive the
American embargoes and possible
Japanese American war, then state
socialism .(they have milder name
for it, is not only desirable-it is
ahSolI1telv essential