894.50/7–2147
The Political Adviser in Japan (Atcheson) to the Secretary of State
[Received August 1.]
The United States Political Adviser has the honor to enclose29 copy of a translation of an eight-point economic policy statement made by the Katayama30 Cabinet on June 11, 1947.
The successful implementation of this policy, which makes broad general promises, appears most difficult in the face of a severe shortage of basic materials and the continued inability of appropriate Japanese agencies to enforce economic controls.
There are also enclosed five copies in English translation and one copy in Japanese of a so-called “white paper” published July 4, 1947 in which the Economic Stabilization Board draws certain general conclusions from a statistical analysis of the present critical economic situation in Japan. In the paper an attempt is made to explain national economic and financial difficulties to the public by comparing them to similar problems faced by Japanese families. The Board’s research into the matter is presumed to have been instituted as a result of a letter dated March 22, 1947 from the Supreme Commander of the Allied Powers to former Prime Minister Yoshida, drawing attention to the necessity for economic stabilization. It is probable that the Cabinet published the study in an attempt to explain increasingly stringent economic conditions to the Japanese public, a considerable part of which seems to have expected miraculous results from the new Cabinet.
A more pressing reason for publication of the “white paper” became apparent on July 5, 1947 with the announcement by the Japanese Price Board of a wage-price policy supporting an average wage one-third less than that demanded by the labor unions. There is enclosed a copy of this statement in Japanese with a translation thereof. Inasmuch as the Social Democratic Party derives its principal support from labor it may have been felt politically necessary to explain the refusal of [Page 257] the latter’s wage demands in the light of Japan’s deplorable economic state and to justify beforehand a low-wage policy. The wage-price policy statement points out that the worker is benefited from an increase in “real” wages rather than “money” wages and declares that the best method of increasing the former is to freeze the latter, improve distribution, and increase production.
With regard to the “white paper”, editorials in the Yomiuri, Jiji, Mainichi, Nippon Keizai, and Asahi newspapers of July 5, 1947 (enclosed in Japanese original together with a summary thereof by Interpreter Y. Kamii of this Mission) welcomed the publication of an admittedly unfavorable statistical study, a new departure in Japanese governmental tradition. Several of the newspapers saw in the publication of such a study a possible attempt on the part of the Katayama Cabinet to prepare an excuse usable in the event of future failure of its economic policy. Most of the editorials warned of the necessity for forbearance and patience on the part of the public and one newspaper drew the conclusion that only by such patience could foreign economic aid so necessary to economic rehabilitation be obtained.