1938-08-30

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HONG KONG DAILY PRESS

GENERAL

HOW LONG CAN JAPAN'S ECONOMIC STRUCTURE

STAND THE STRAIN?

BY Y. C. KOO

Editor's Note:-This article, which is appearing in three instal- ments and is to be concluded tomorrow, was written by Dr. Y. C. Koo, President of the Kwangtung Provincial Bank, and has aroused great Interest in Far Eastern financial circles after its translation from the Chinese original first published in "The Eastern Miscellany." -

PART TWO TRADE AND EXCHANGE

Brushing aside the financial considerations of Japan, the econo- mic conditions of the Japanese "people are also far from favour- able: Productive enterprises that answer to the needs of the military. have been benefited, but the majority of the Industrial enterprises have suffered. The production index of light industries of the first three months of the current year has shown a marked drop as com- pared to that of the corresponding period of the last year. The phenomenon not only shows that Japan's oversea markets "have shrunk, but also reflects the decrease of the purchasing power of the Japanese people..

"BACKED HORSES BY THE STARS”

William Gallon, sixty-year- old. handsome, white-haired .master-mariner, claimed at Middlesex Sessions that he had an unerring system of backing horses by the stars.

He stepped from the dock to serve, a sentence of six months in the second division.

A recent report from Tokyo sald¦ This figure, however, is an un- that the Japanese Government, padderstatement of the actual state of enforced regulations controlling (affairs. If we eliminate from the all muterial supplies, Metals, cot- trade statistics for the first half- ton, hide, rubber, American lumber, year Japan's trade with Manchuria, | lead, zinc, Aluminium and antimony the Kwantung Leased Territory were subjected to mitations. lufand China we shall then find that the future, mercury and other her real import surplus--to pay for chemicals, as well as native lumber, which gold must be exported-was medicine, and paper will also be about 390,000,000 yen as against subjected to government control 725,000.000 yen during the first half ing £80 by false pretences from He was found guilty of obtain- control mensures have of 1937.

Mrs. Frances Bell, millioner, of caused heavy collapse in the Ja- This serves to show that import Whitton Manor-road, Isleworth, panese stock market. The recent control has not averted Japan's serious floods which damaged the calamity in her foreign trade. It autumn harvest, have made Ja-has rather aggravated the state of pan's food problem more acute. deterioration in her exports.

These

MILITARY NEEDS

1937.

described himself, according toj In his pockets Gallon, who had

Mrs. Bell, as the owner of a yacht and two cinemas, jinkled 4s. 7d.

SIX CHILDREN

Gallon, married with six child- ren said while giving evidence that with an initial capital of £100 he his betting system was so good that could well attord, to pay an assid-

EXPORTS SINK During the month of April. Jast Japan has always depended on

Japanese exports sank 60 percent her exports and invisible incomes below the figures of April 1937. A mainstays of her economic recent release from Washington asructure. But after the commen-showed Japan's exports to America In the sphere of foreign trade, period this year, imports of raw cement of hostilities, both exports during the first half of the current tant £1 every race day. Japan's imports and exports have materials diminished to 257,998,000 and invisible incomes have decrea-year to be US$58.542.000, a drop both diminished. In the first three yen Japan, essentially an industrial sed sharply. Military supplies have of 4 percent as compared to He paid Mrs. Bell £6 a week, months of the last year Japan's ex-nation, depends very largely on the in the meantime been bought from US$111,000,000, for the first half of not out of his winnings, but port was valued at 701,088.000 yen import of raw materials to feed abroad.

out of her own £80 which she but the volume of exports for the her productive enterprises. With

Take petroleum alone. Japan'a

had advanced as surety for a corresponding period

Her imports from America stood this year imports united by the Japanese cramary annual consumption was at US$124,958,000 for the first aix

partnership. That wage ceas- dwindled of 589,753.000 yen. Japans overnment, certain essential ra estimated at about 3,500,000 tons. months of the current year, showing

ed. however, after three weeks. imports for the same period last materials have been for the difwhile her output was less than one a drop of 25 percent as compared ren, went to see Gallon, who ran a Mrs. Bell, mother of two child- year was at 1,007,043.000, yen while ferent Industries forbidden ek- tenth of what she required. During to the same months this year imports trunce thereby affecting adversely the present invasion of China the period in 1937.

US$165,611,000 for the same

ibrary in Whitton, after she had dropped to 624,128,000 yen.

both export trade and productive

need of that commodity must have

seen an advertisement for a part- Yielding to the agitation or the ner with £100 capital. The shrinkage of Japanese ex-Industries.

increased greatly Japan's stock of important com-purchase from abroad must have panese Ministry of Finance has her millinery business. She found

and that the Japanese economic circles the Ja- ports is concrete proof that Japan

She raised £80-her savings from has lost many of her Overses mercial goods has also been fast

mounted correspondingly.

recently loosened the limitations that her jcb was to telephone, a markets. By unceasing endeavours dwindling since the outbreak of Japan has bullit up her oversea hostilities. Her stock of cotton With regard to steel; iron, tungs-placed importation pi raw few bets to bookmakers. This oc- markets and increased her exports. which was at 364,520 bales in June ten and copper, and rubber, Japan materials. The excess of imports in cupled only half an hour each day. But at present when production 1s 1937, became 188,053 bales during is very far from self-sufficient and the months to come is bound to she became uneasy, tried to get on the decline at home, when March of the current year. Her relies heavily on purchases abroad rise further. prices are low In America and holdings of wool, which was at 93, Europe. when a military campaign000,000 lbs. in June, 1937, lessened

is proceeding on the continent, and to 28.000.000 be. by March last. when domestic prices are skyrocket- Ing. Japan Linds it impossible to "cumpete with others in the markets

abroad.

Added to her difficulty is the spontaneous boycott of Japan- ̧ ese products which has now spread all over the world. The efforts of the Japanese Gav-. ernment and capitalists for years have now been entirely undone,

- RAW MATERIALS Raw materials are the chief type ui Japan's imports. In the first quarter of the last yeaï Japan im- ported raw materials to the extent; 01 657,649,000. yen For the same

DIMINISHED SUPPLIES Japan's present stock of coal. copper and oll has not been civulged because of their relation to military operations, but it can be surinised that the supplies must have diminished substantial--| ly..... Japan's holdings of pig-frou. petroleum and steel and their output have also been kept a strict secret.

That she is lacking in hides was made known recently by the control of the expert șof bides in North China which may only be shipped to Japan. In short, Japan's material re- sources are fast approaching the point of exhaustion,'

IMPORT CONTROL

Owing to her unfavourable balance in foreign trade oc- casioned by her huge import of foreign materials, Japan re-... sorted to control of importa last year. But in spite of that measure, Japan's imports last years, including Korea, and Formosa, were still 635,906,000 yen in excess of exports,

SHIPMENTS OF GOLD

How can Japan pay for such constantly adverse balances of trade? She can only pay for it with her stock of gold of which there is not much left in the Bank of Japan. The gold reserve in the Bank of Japan. with the Yen at its old valuation, was worth only 488,000,000 yen In August 1937, In September 1937 the Japanese

her money back. falled, and went to the police.

"CONVINCING MAN"

I talked with Mrs. Bell after

TUESDAY, AUGUST 30, 1938.-PAGE 3

SAY

Gordon's

...and know what you're drinking/

GORDON'S

DRY GIN

LONDON

NO COLOURING MATTER

NO INJURIOUS INGREDIENTS

SUMMER CLOTHES

Women's, Men's & Children's.

the trial (writes a reporter). WANTED URGENTLY

She said "I was completely

convinced that Gallon was a wealthy man, and I believed his stories of owning yachts and cinemas. I don't bet, and I didn't know that I was going into a betting busi-

ness.

In the first three months of the Government ordered a revaluation

"As for that matter about the current year, Japan's import ex-f this fund, turning it into ap-stars, well, a lot of people believe cess was brought down to $5,891,000 proximately 1,282,000,000 yen from in astrology, and Gallon was a yen by the forcible prohibition of which 801,000,000 yen were left in convincing man.” the import of even Items of neces-the Bank of Japan, the balance sity. By the end of June, however, being given to the Ministry of it was reported that import excess Finance to constitute an exchange

of Japan has reached 200.000.00 stabilisation fund/

yen.

(Continued on Fare 5)

Mrs. Bell said she didn't know the details of Gallon's betting sys- tem, but she added that he had blamed its failure on the bad spring for racing this year.

HONGKONG BENEVOLENT SOCIETY

Monday & Thursday

ICE HOUSE STREET

10 to 12 Noon.

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