Evening star., 1948-12-11
japanese Industry Issue

Our Governments decision to abandon
the policy proposal it had originally pre-
sented to the Far Eastern Commission
for deconcentration of Japanese industry
and finance Is presumably motivated by
broader considerations than those con-
tanned in its official pronouncement.
The original proposal was detailed
plan for breaking up Japanese industrial
and financial combinations, together with
broadening of the ownership in those
economic fields in the interest of democ-
racy.
The industrial life of Imperial Japan
was a curious blend of traditional feud-
alism and Western monopoly capitalism.
Economic power was concentrated in a
few gigantic cartelS or trusts, mainly
owned and effectively controlled by a
small, tight-knit oligarchy of enormously
wealthy families known as Zaibatsu. That
oligarchy played Fundamentally the game
of the Japanese militarists in their pro-
gram of aggressive imperialism from which
the zaibatsu richly profited. Obviously,
the power of the Zaibatsu had to be broken
along with that of the militarists if the
threat of future Japanese aggression was
to be averted At the same time, the
shackles of monopoly had to be stricken
from Japan's economy in order to insure
healthy recovery along democratic lines.
The original plan envisaged both those
aims. Meanwhile, in the year and half
which has elapsed since its first submis-
sion to the Far Eastern Commission, most
of the plans objectives seem to have been
realized by the efforts of our occupational
authorities headed by General Macarthur,
with the willing cooperation of the Japa-
nese government Itself. The Zaibatsu have
been virtually removed from the economic
picture, while recrudescence of monopoly
seems to have been substantially guarded
against through Japanese antitrust legis-
lation and the creation of a Fair Trade
Commission. As a result Of this surpris-
ingly rapid evolution, our Government
feels that the plan has been "overtaken
by events" and that what remains to be
done can be accomplished by existing
methods.
Over and above this line of reasoning
undoubtedly valid in itself, there probably
AACo u SAA11G III CulH1lASlS lIUIu ucCCuGI dllEd.
ton Of industry as an end In itself to
pressing considerations OF Japan's indus
trial recovery. Against theoretical perfec-
tionism stands the hard fact that an
impoverished and overpopulated Japan
must regain large measure of industrial
efficiency II it is not to remain at once
chronic drain on American relief subsi-
dies and q fertile breeding ground of
radical unrest stimulated by the rising
tide Of communism in nearby China and
elsewhere on the Asiatic mainland. That
sense of political urgency doubtless ac-
counts for the rejection by the Far
Eastern Commission of proposal by the
Soviet representative for a new system
of international controls which would have
hobbled Japan's industrial revival The
Soviet member found himself in a minor
ity Of one, the ten other members, repre-
senting as many nations, turning down
his proposal. Considering the apprehen-
sions of an economically strong Japan felt
by several member states, this can be
interpreted as striking measure Of COM
mon awareness of the Communist peril
in Asia peril which seems to justify
the policy Of General Macarthur and our
Government toward Japan's economic
rehabilitation.