WAR COSTS.

Manawatu Standard, Volume LVIII, Issue 49, 26 January 1938, Page 7

WAR COSTS.

JAPANESE METHODS. EXPLOITING OCCUPIED AREAS. LONDON.'Dec. 15. Japan’s attempt to meet the enormous cost of waging war in China is attracting no less attention here than is the progress of the experts in Tokio, who are planning economic reconstruction in the occupied areas, and whose plans are being studied by the newly reorganised Planning Board. It is, of course, generally understood that the general scheme is to entrust economic exploitation to separate syndicates to be formed in each branch of industry. The Japan Power Federation will take over the development of electricity; the Hsing-Chun Company, Limited, a subsidiary of the South Manchuria Railway, is, in co-op-eration with other interests, to exploit the salt resources; and Japanese cotton importers and spinners are planning to establish a new company among themselves, to improve cottongrowing in Hopei and Shantung. Reports make it fairlv clear that it is regarded a.s urgent that aid should he given to the farmers in the wardevastated area. The purchase by the Japanese mills of 1.500.000 piculs of cotton and 20 000.0001 bof wool lias been suggested, despite the fact that restrictions on the import of these materials are in force. STATE OF" INDUSTRY.

The Tokio -correspondent of the Economist states that, stimulated by war needs, business activity is generally 011 a high level, and . industrial production is being intensified, even in branches not concerned with munition production. He notes: “The output of cotton yarn during October totalled 134,791,0001 b, a decrease of 5,220,0001 b compared with September, tvhile rayon production amounted to 28,554,0001 b, an increase of 1,554,0001 b. The decrease in cotton yarn production is explained partly by the smaller number of working days and partly by the curtailment of operations as the result of restrictions on the import of raw cotton. Many small business and retail traders, however, have been adversely affected by the Sino-Japanese hostilities. In certain branches of the textde trade which cater for the home market, and even in such a fine silk producing centre as Nishijin, Kyoto, there are many idle looms and a number of workpeople are unemployed. Bicycle manufacturers and rubber goods producers also are among the worst sufferers. Department store sales m recent months have been from 15 to 20 per cent, below those of a year ago. primarily because of the Governments economy campaign.” The correspondent records that the October trade returns show that, although imports have been reduced in a number of cases under the restriction scheme, the values of both imports and exports are still substantially higher than a year ago. The increase in imports is obviously accounted for mainlv by iron and steel, petrol •and munitions of war (the detailed figuies of these articles have been made public since August last). The three articles subject to import restrictions, namely, cotton, wool and timber, show a decline of 24.9 million yen ni the aggregate value of. imports. Considerable increases were recorded in the value of exported textile goods, with the single exception of raw silk. price indices. He .adds: “The note issue expanded rapidly from 1,681,401,000 yen to 1,781,223,000 yen between October 1 and November 1. Allowance, however,' must be made for Bank of Cliosan notes—issued under the new Banking Act against Bank of Japan notes—which are in circulation in North China as a means of payment by the expeditionary force. The actual circulation at home, therefore, .has not increased very considerably. Money rates remain practically unchanged; fine bills are quoted at a fraction above 4 per cent., and overnight loans are obtainable at 2i per cent. Commodity prices have again turned downwards. The Bank of Japan’s wholesale index number for October recorded a drop of nearly 1 per cent, on the month, after an advance of 1.6 jer cent, in September. The price index for October of all shares listed on the Tokio Stock Exchange was up by a little over i point against a month earlier.”