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THE CHINA MAIL, JUNE 21, 1989.
JAPAN NEARING END OF TETHER AS WAR DRAGS
LACK OF MONEY
AND GOODS
Indications are everywhere apparent to-day that Japan is nearing the end of the tether, econo- mically and financially, after almost two years of war with China.
The situation suddenly has become acute. For a long time, there has been a shortage in money and material, but this appeared to be nothing more than the normal contraction of economy in a nation at war. To-day, however, every economic baro- meter in Japan is registering danger-signals.
",
GERMAN ARMY WANTS JEWISH
•
DOCTORS!
Reliable information has reach- ed Paris from a town in South Germany that Jewish doctors in Germany who served as medical officers with the German Army during the war have been in- structed to report to the nearest military headquarters, “with view to resuming service in the same capacity in case of emer- gency.
This order applies even to 100 per cent. Jews.
carry.
CZECH GOLD
Sir John Regrets Transfer
LONDON, TO-DAY. · TRANSFER OF CZECH GOLD HELD IN LONDON TO GER- MANY WAS AGAIN THE SUB- JECT OF A SERIES OF QUES- TIONS IN THE HOUSE OF COM- MONS YESTERDAY.
The Chancellor of the Exchequer, Sir John Simon, said the assets referred to were entrusted to the Bank for International Settlements
For this reason, neutral observers are placing credence in reports that Japan, through third par- tie is cautiously working toward a settlement of granted Japan. Businessmen in every by the National Bank of Czecho- the so-called China Incident.
?
Į
FOOD COSTS - MORE
*
•
Slovakia.
that are almost entirely cash-and-
have Very few credits
been
nation have demanded, and got, the ac- tual cash before the ship sailed.
Japan met the problem of paying
The British Government could cash for necessary commodities in not accept responsibility for this FINANCE-The yen recently sank three ways-with gold reserves accu-action, and British members of the A quick picture of inside Japan, to-to an all-time low in Shanghai, the mulated in New York and London dur- Board of the Bank for Inter- day, looks like this:
nearest foreign exchange market ing peace-time, through domestic pro- national Settlements were not res- FOOD-The government is rationing compulsory registration of gold articles duction of gold, and through export milk, butter, eggs and other essentials is beginning corporations are is-trade whereby some foreign gold was ponsible to the Government.
a California lemon costs
30 suing government "baby bonds" instead obtained in payment for Japanese fin- cents, and is not to be had even at that of cash, for bonuses
The Finance ished goods. price
the total average of food Minister recently expressed "disap- costs has risen 13 per cent. in a year, pointment" over the 1938 gold mining 23 per cent, since the day the war yield
in April, not a cent was started, July 7, 1937
spent by Japan in the United States MATERIALS-Old razor blades and for articles classed directly as war used pen-points are being melted down materials. for munitions
thousands of iron man-hole covers have been replaced with wooden ones.
cotton and woollen cloth have disappeared from the retail market the attempt to substitute staple fiber (a vegetable thread) has been unsuccessful.
BUSINESS-Earnings in the geisha
banks have been ordered
INFLATION APPEARING Two salient facts emerge from all this.
IN NEAR-PANIC
The fiscal year ended March 31. At that time, despite the strictest secrecy, it became known that financial circles were in a near-panic over the shortage of foreign currency, gold.
Sir John Simon declined a sug- gestion that a conference of signa- tories to the Convention setting up the Bank should be called to alter the Bank's organisation.
IT'S ALL TOO BAD! The recent event was "very de- No figures, naturally, were publish- plorable," he said, but it was also ed. Nor is anything known, accurate- One is that Japan's reservoir of for- ly, about the amount of gold produced very unusual, and the general use- eign currency has finally fallen so low in Korean, Formosan,
fulness of the Bank in other ways and Japanese that the most drastic methods have mines in 1938. Presumably, the an- was accepted. been adopted to keep the flow going, nual yield is about $65,000,000. In view at all: The other is that a condition of Finance Minister Sotaro Shiwata's
record
developed inside Japan.
the output, financial circles were in- to reduce the interest-rates on loans to: The Japanese problem, in wartime.clined to doubt that this figure was he could change the Bank's Con- small businessmen
price-control, is fundamental.
reached last year.
He regretted what had happened and had done his best to discover
quarters are approaching an all-time [of inflation-if not real inflation-his statement, voicing disappointment over if there was any means by which
stitution.
However, there were obviously very great difficulties. Reuter.
without control of wages, has forced The nation is poor in vital resources, Official figures showed that Japan thousands of the latter into bankruptcy oil, iron, coal, cotton, wool, pulp, chemi-shipped about 32 per cent. less gold to a special agency has been organ-cal. It must buy these things. For the United States, in 1938 than in 1937. ised to help them transfer to new nearly two years now, it has been buy- Records of the state department, at fields
ing them, in huge quantities, on terms Washington, disclosed no Japanese purchases for war materials in the United States during April. This means obviously hard put to get the money to actual armament. Unquestionably. buy necessities for the war machine. many of the purchases made by Japan were indirectly for use in the war.
OFF THE RECORD
Beauty Salon
183). The Regimer
4-14 and Tribune Byndicals
“Now remember when a customer leav say, 'Doing anything to-night, Gorgeous'?'
Here's Luck
By ED REED.
-give her the eye and
EWO BEER
OPERATING COSTS SOAR The government has arbitrarily sta- MAKE DESPERATE EFFORT
bilised prices. But operating costs, borne upward by the rise in Two new government edicts indicate have sky-rocketed. Consequently, the wages, a desperate effort to replenish the gold margin of profit on the sale of any in- holdings. The finance ministry recent-dividual article has been virtually wip- ly published the following ordinance: ed out. On many Japanese products to- "Persons who possess such manufac-day, there are "handling fees" or "ser- tured articles using gold as are enu- vice charges," amounting to a few sen. merated hereunder
shall present a report on the amount of holdings to the minister of finance not later than July 5:
"Rings, hand ornaments and other personal ornaments; watch cases, spec- tacle rims and other personal equip. mont; tobacco pipes, cirgarette cases cups, pots and other articles for use in drinking and eating; candlesticks, in- cense burners, paper-weights. knives, paper knives, seals, and other household receptacles,"
pen-
Jewellery guilds have been "request- ed" not to use gold in any manufac- ture. Stores, by the same request, will not display any gold' articles.
Many retailers have failed. Hence, interest-rates on loans have been cut from 5.7 per cent, to 4.8. Thousands of bankrupt businessmen are turning, as salaried men, into other industries.
Money is rotating. faster and faster. There is a shortage of commodities to meet the demand. This is not neces- sarily inflation, but economists say it is the next thing to inflation.
This domestic situation, while it is serious, is not quite so acute as the problem of finding money, to finance the war. There is also the enormous problem of financing the peace.
·
ATMOSPHERE OF DOUBT Six months ago, Japanese financial GO RIGHT INTO HOMES
leaders were supremely confident that Japan's economy could do both. To The inference is that the Japanese day, there is a strong atmosphere of government is going right into the doubt, hesitancy, uncertainty, evident homes of its people for every scrap of in Tokyo, Pessimism is not openly the precious yellow metal that may be expressed, but certainly the great op- used for the purchase of materials to keep the army in action in China..
timism has evaporated.
Since the beginning of
the war,
etcocontinued
At the same time, it was officially Chinese, leaders have insisted that announced that a ration-system, apply- Chinese resistance could ing to butter, milk, eggs, tea, sugar long enough to cause and other food products, would soon Japan's economic structure. Neutral collapse in go into operation. Japanese newspapers observers doubt, to-day, that Japan will said the government had decided on crumble in this way. But a stalemate, this step, "even if the living standards wherein Japan's finance would be bur- of the people must be lowered, for a time:"!
Japan plans to export these commo dities Sold abroad, they will add at least a trickle of foreign currency to
There are rumours in Tokyo that the whole stream. Every cent of for- Japan is trying to make a deal" with eign money thus obtained will be avail-China, to write some kind of com- able for the continued financing of the promise. The financial situation is
known to be serious.
WATC
That is the picture of Japan in the world rourket, Economists say she is
dened with the cost of maintaining a great army fighting on the continent for an indefinite period of time, would be tantamount to the same thing.
It may become bad enough to end the war,
No comments yet.
Private notes are available after approval.