893.01 Manchuria/854
The Consul General at Mukden (Myers) to the Secretary of State
[Received March 13.]
Sir: In view of the importance attached by the Japanese to the establishment of closer economic relations between Japan and Man-choukuo and of its bearing on American and other foreign trade with this territory, I have the honor to report briefly on the developments to date in this regard as far as they are ascertainable. It may be stated at the outset that although the political policy of Japan in respect to Manchoukuo has to all intents and purposes been definitively settled the same unanimity of opinion respecting its economic relations with Manchoukuo has been noticeably lacking. Apparently, however, a decision regarding its basic policy has been reached as a result of exhaustive investigations but before discussing it a brief outline of antecedent developments may be of interest.
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It was recently learned from an official source that the Japanese Embassy at Hsinking, in conjunction with other Japanese organs, had been making exhaustive studies of this question and that a decision had been reached on the lines as given above. Generally speaking, it seems that the economy of Manchuria is to be made to conform to Japanese interests and that its resources, agricultural, mineral and forestry, will be developed with particular reference to supplying Japan’s industrial requirements. Besides encouraging the cultivation of cotton and wheat—South Manchuria is said to be well suited to growing cotton—, products which are exported in large quantities from the United States to Japan, the production of wool is to be promoted and very probably cattle raising as well. On the other hand the rapidly expanding industries of Japan, more particularly those producing the cheaper grades of necessities, such as cotton goods, woolen goods, rubber goods, and sundries, will give special attention to this market.
Japanese industrialists in the Leased Territory and Manchuria, who are said to be opposed to keeping Manchuria as a producing center of raw materials and to be proponents of a system of preferential duties for their products imported into Japan, appear doomed to disappointment. Too, the pleasing picture of a rapid development of Mukden as an industrial center, as painted in some press reports during the past year, seems to lack foundation. It is understood that no concrete steps for establishing any major industries in Manchuria [Page 167] have been taken and in view of the decision referred to above it is to be inferred that the proposed establishment of enterprises affecting Japanese industry would be very definitely discouraged.
Another factor in Japan-Manchoukuo economy concerning which investigations are being made is Japanese emigration to Manchuria. Except for a small contingent of ex-soldier colonists, no officially fostered or regulated immigration has yet occurred. However, a special immigration section in the Special Service Department of Japanese Military Headquarters, Hsinking, has just been organized and according to reliable information the military are working on plans for large scale immigration from Japan and possibly Korea. The restriction of Chinese immigration seems also to be intended. Many observers regard a large scale immigration from Japan as impracticable. Too, in the case of Koreans if Manchuria’s rice crop is to be limited to home consumption—and Koreans are preeminently rice farmers—the main economic motive would seem to be lacking.
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It is clear from this brief review that the Japanese economic policy in Manchuria has been projected primarily for the purpose of enhancing or strengthening the economic position of Japan. The military occupation of Manchuria has been explained as a measure of national defence and so it appears that its economic occupation or domination—”the cooperative industrial principle”—may be similarly explained with equal propriety. Indications clearly point to the Japanese monopolizing the exploitation of the natural resources of Manchuria either as concessionaires or under the guise in some cases of joint enterprises with the new state and in others of nominal state (Manchoukuo) monopolies. The far-reaching control over communications and public utilities exercised by the South Manchuria Railway Company has already been briefly touched upon.
This office is endeavoring to keep in touch with the economic development in this territory and will submit special reports on its various phases from time to time. In this connection the Department’s attention may be called to the fact that it has labored under severe handicaps in the collection of material for reports since September 18, 1931. That freedom of movement and making contacts is gone for the time being at least and the Japanese are not only very secretive in regard to their plans and operations but look with suspicion upon inquiries concerning them.
Respectfully yours,