POPULAR FINANCE MINISTER KAYA
By SHOH-JI YASUDA
ONE of the most popular finance ministers Japan has had was the late Korékiyo Takahashi. Apart from what he accomplished for his country, he was a perfect picture of opulence and as such had a strong hold over the people. Smiling, genial, friendly, and with the least affectation, he was always received with public enthusiasm. He was so popular that there have been persons who have doubted whether his place would ever be taken by another statesman. But in Mr. Okinori Kaya, the Minister of Finance, we have a statesman who has won a permanent place in the hearts of our people and promises to equal his predecessor in popularity. His dark brownish complexion, largely built frame, portly dimensions, and almost overflowing energy impress all those who come in contact with him as a man and leader on whom absolute reliance may be placed. In point of bodily weight he would match any of the best wrestlers now seen in the ring. Not the last important is his smile which gives to his appearrnce [sic] such a benign and kindly expression as is generally associated with the Japanese deity of fortune, Daikoku. As a matter of fact, this association is so happily close that people turn to him with almost the same expectations they do of the deity of fortune.
Mr. Kaya's picture started becoming familiar when he became Minister of Finance in the first Konoye Cabinet. Through newspapers, magazines, newsreels and public forums he became known to the public. And his popularity seemed to grow as his looks deepened in their kindly and almost benevolent expressions, year after year. He is one of those statesmen risen from the bureaucracy. Like two other members of the Tohjo
Cabinet, namely, Commerce Minister Kishi and Agriculture Minister Ino, he began as a career man, but his statesmanly abilities were recognized even while he held lesser positions in the Ministry of Finance. When a departmental director, Mr. Kaya was found, with Mr. Kishi and Mr. Ino, in the group of government officials in the forefront of the reformation movement. In those days they were brought into closer terms which mark their association today. Likewise, he then came to know intimately Lieutenant-General Teiichi Suzuki, director of the Planning Board. Among the cabinet members charged with economic affairs and bound by close personal ties of friendly relations, Mr. Kaya is the most senior and takes upon himself their leadership. With Premier General Tohjo his friendship dates from the time when he was director of a budget section and the present Premier was director of the Section of Military Affairs of the War Ministry. Mr. Kaya, therefore, has reason to consider himself as a senior member of the cabinet, second only to General Tohjo, and to take pride in the strong combination of cabinet members formed for administration of economic affairs.
Mr. Kaya was born in 1889 as the third son in a family named Fujii, in Yamaguchi Prefecture. He was later adopted into the present Kaya family of Hiroshima Prefecture. As a student he was not one of those who rejected social activities. While in the First Higher School, he happened to fall ill and for convalescence went to the seaside town of Hohjoh, Chiba Prefecture. There in the family where he took his lodging he found the one whom he was later to marry. This first flame of romance must have been an inspiration to him because he took greater interest in his studies. He improved his knowledge and graduated with honours from Tokyo Imperial University in 1917, where he had completed the course in the political department of Law College.
Mr. Kaya started his official career in the Ministry of Finance. As a secretary of that Ministry he went to the United States and later to Europe. After several years' stay abroad he returned
and successively filled the posts of section chief in the Accountant Bureau, section chief in the Budget Bureau, and director of the Accountant Bureau. Under Finance Minister Ei-ichi Baba he served as director of the Financial Bureau of the same Ministry. When the Hayashi Cabinet was formed in February, 1937, Mr. Kaya became Vice-Minister of Finance under Mr. Toyotaro Yuki. When the first Konoye Cabinet was installed in June of the same year he was given the portofolio [sic] of Finance. He held the same post until he was replaced by Mr. Seihin Ikeda in May of the following year. He left the Ministry after serving it for twenty-one years, most of which time he spent in the Accountant Bureau. This is as remarkable as the cases of Mr. Sohtaro Ishiwata, who became Minister of Finance in the succeeding Hiranuma Cabinet, and that of Mr. Kazuo Aoki. The former devoted the greater part of his career to the Revenue Bureau and the latter to the Finance Bureau. These men had been talked of as the three master minds of the Ministry of Finance. But of the three Mr. Kaya, because of his long connection with the Accountant Bureau, was able to amass valuable experiences and gain the best training for statesmanship. The Accountant Bureau which is charged with the compilation of yearly budgets enables one to know all branches of the government and to look into them on a composite basis through the estimates laid before it. No other branch of the administration can better train a young official to acquire statesmanlike outlooks.
Mr. Kaya's name first attracted public attention in 1934 when the Government had to prepare its budget under difficulties. The main difficulty was seen with regard to the Navy Department. Mr. Kaya as director of the bureau settling the budget was well conversant with naval affairs and made a drastic cut in the naval estimates. He did what no other man of the Finance Ministry would have dared. The confidence with which he took the step and the mental calibre he showed in dealing with the situation at once raised him in public estimation. From that time onward his reputation rose almost yearly as his name was
continually linked with the drafting of the budget. When the late Masanobu Fujii, as director of the Accountant Bureau and as protagonist of the "sound finance policy" of the time, was to compile the budget, a situation of extreme difficulty developed. But the situation which might have proved fatal to the Government was finally disposed of successfully, due in no small measure to Mr. Kaya's statesmanship, though most of it was seen only behind the scenes. He was always keen in grasping the trend of times. He knew where the real driving forces in the Army and Navy were and how they moved. On no less intimate terms he found himself with the progressive elements in all departments of Government and through his personal contacts he discerned in which direction the movement of the time proceeded. The personalities with whom he came into touch during those times and the situations he had to deal with prepared him for the rôles he was later to play as a statesman and brought out in him all those qualities without which statesmanship is impossible.
Mr. Kaya is an expert on finance, a technician, and as such, in the keeness [sic] of mind he had few to equal him even among the officials of the Ministry of Finance. He stood head and shoulders above them. He is also a man of fine, even delicate sensibilities, but no one who looks at his largely framed body would imagine it. He might retort with a sharp reply or sometimes appear disturbed, but he is at his best and his personal charm is almost irresistible when his body of more than two hundred pounds rocks with amusement. He is of that class which is grouped by the generic name of intelligentsia, but he scorns those who keep company with their own speculations and theories but fail to emerge from their towers of ivory. And because he scorns the pale-faced, academic class whose weakness he knows best, he is seen to make an effort to depart from that influence. He strikes one as a man holding himself disdainfully aloof from details of life or work, and contemptuously holding them as beneath his attention, but, as a matter of fact, he is far from that. He is always painstaking in his work. His statesmanlike outlook
never interferes with his capacity for detail. It may be appropriate to say that he is a statesman and an executive blended into one. He is so much at home with figures that he is called a man "living in the world of figures." The figures and facts he gives in the Diet in reply to interpellations are said to be so accurate and minute sometimes, that they surprise even the officials sent out to the assembly from the Finance Ministry to help him in such matters as occasions arise. In the Ministry itself there are few men who have more thorough knowledge of the whole establishment, facts or figures. He kept himself absent from the Ministry for three years until he recently returned there to assume its leadership for the second time. But all key positions within the Ministry, including that of the Vice-Minister, are held by men whom he had always had in his good book as capable and trustworthy timber of which the central institution of finance should be built, when he was gone. His influence over the Ministry is such as few Ministers have had there. However, something like it is seen in the cases of Mr. Kishi at the Ministry of Commerce and Industry and Mr. Ino at the Ministry of Agriculture and Forestry. It may be said, therefore, that the field of economic administration, as the present cabinet stands, is in the hands of men whose thoughts, tending in the same direction and with kindred sympathies, bind them in a strong teamwork, and who are each well supported within the organizations they lead. This combination makes no doubt strong contributions to the political power of the Tohjo Cabinet.
Mr. Kaya has always been a man of self-confidence. His confidence comes of his consciousness of the effort he puts forth and the mastery he has of the subjects he deals with. Even when he was still director of the Budget Bureau of the Finance Ministry, he would tell those to whom he could freely unbosom himself that he felt as if he carried on his shoulders the whole structure of national finance. When he was director of the Accountant Bureau and permitted to speak in a similar vein, he would say that all the work he was doing then was to prepare him for the post of Prime Minister he was to assume at
some future date, not promised but nonetheless foreseen and even anticipated in his mind at least. If there was a tone of levity in such of his talks there was also a ring of self-confidence. But his attitude is never ostentatious or obtrusive. He had friction neither with those who stood above him nor with those who served under or for him. Because of his robust health and overflowing energy, he was always able to apply himself to study as few men could; and because his mind always moved with the major trend of times, he was a keen judge of the situations he had to deal with. When the political structure of the country had undergone a definite change under the impact of emergencies, he was one of the first to depart from the camp of those financiers who adhered to the principle of balancing the budget as the only canon of national finance. As Vice-Minister of Finance, he mustered the best brains from all departments of the Ministry and had them work out economic and financial programmes for setting up a "defence State economy." The plans thus developed under his direction have never been made public. But they were so comprehensive in scale and sound in principle that with but slight modifications they now form a basis for the financial policy of the Government, as it plugs its way on meeting one wartime situation after another. The author of these plans deserves full credit for foresight and clear vision.
When Mr. Kaya became Minister of Finance in June, 1937, in the Konoye Cabinet, he soon announced what he believed should be the three basic principles of finance and economics, thereby setting forth in clearer terms what lines his policy would take. He laid the foundation for the wartime structure of national economics and finance as it stands now. This would hardly have been possible unless he had been such a keen student and indefatigable worker as he always has been. When the China affair broke out in July, 1937, he set about two undertakings of unusual importance, the one was the compilation of a wartime budget on a scale hitherto unknown in the history of the country, and the other an increase of taxation on a commensurate
basis. That he met the situation squarely and successfully may not mean any particular credit: any man in his position would have been called upon to do as much. But through those times he acquitted himself in sucha [sic] manner as to favourably impress those who followed his work. It was seen that he was certain of the ground he trod. He applied himself to his work and addressed the public so frankly and at times even so intimately that he not only won full support within the organization he headed, but inspired widespread confidence. Without any show of bureaucracy, he seemed close to the minds of people whom he led and directed.
It is particularly worth mentioning that at the extraordinary session of the Imperial Diet in September, 1937, he instituted a new special account for extraordinary military expenditures. To this new account was transferred what had hitherto been carried under the head of China Affair Expenses. This procedure, taken to meet the exigencies of wartime finance at the time, served the useful purpose of regulating the expanding fiscal operations on a permanent and stable basis, upon which the enlarged framework of wartime finance necessitated by outbreak of the Pacific war has been adjusted with little or no trouble.
When the Konoye Cabinet effected its first reshuffling in May, 1938, Mr. Kaya yielded his position to Mr. Ikeda. But his retirement was due to rather peculiar circumstances. It would be wrong to say that his financial policy had been fatally defeated. He had at the time espoused the cause of exploring new avenues of finance with men like Mr. Shinji Yoshino, then Minister of Commerce and Industry. But the bureaucrats leading the economic movement at the time lacked political or statesmanlike tact and adroitness and were apt to have friction with financial circles in which still the liberalistic creed of old persisted to a not inconsiderable extent. For this reason he was obliged to resign, together with Mr. Yoshino and Mr. Yasui. As for Mr. Kaya, he had been on fairly good terms with financial leaders, because of the support given him by
Mr. Yuki, who had been his immediate predecessor and in that capacity had recommended him as Vice-Minister and was at the time Gnvernor [sic] of the Bank of Japan. Those who know all these inside affairs are of the opinion that the Tohjo Cabinet, although it has no member from financial circles, will get along with financial leaders through its Finance Minister.
Men coming from the bureaucratic clique get the best training for statesmanship when they go out of office. When Mr. Kaya left the Ministry of Finance after his long career of twenty-one years, it seemed for a time that he might take the way of many other career men before him. For there are two types developed from men retiring from their official careers. The one sinks with the decline in fortunes; the other, put to the test of power, rises above the situation. Mr. Kaya was never in doubt as to the course he should take. From the ministerial post he took almost immediately to lecture tours which brought him into direct contact with the general populace. He occupied a chair as lecturer at a time when Tokyo Imperial University carried out a sweeping change in the faculty of economics department. He was oftentimes present at meetings where round table, free discussions were held. Through all such occasions he kept abreast with the movement of the masses. He plunged himself into the midst of the crucible of war through which the economic life of the nation was being tempered for the great ordeal.
As a member of the Commodity Price Investigation Council, Mr. Kaya was an able assistant to Mr. Seihin Ikeda. With Mr. Hisakazu Shimazu, then Vice-Governor of the Bank of Japan and at present his own successor as President of the North China Development Company, and with Mr. Kamékichi Takahashi, a popular economist, he outlined a plan for regulation of commodity prices. He was at the same time keeping himself busy as adviser to the Ministry of Finance and to the Mayor of Tokyo. From various quarters came calls for his service. It was probably the account he had given of himself through those strenuous days that impressed military quarters, so that he was
soon offered the leadership of the North China Development Company. It may also be added that he was appointed by an Imperial order a member of the House of Peers in December, 1937.
Mr. Kaya became President of the North China Development Company in August, 1938, as successor to the late Sonyu Ootani who had been its first head. The company had only been created in November of the previous year with a capital of ¥350 million as a semi-official enterprise with the object of promoting the economic development of North China or the area to the north of the Yellow River. For two years he remained in charge of the undertaking. Most of this time he was in China because he believed that he could be true to his duty only when he was on the spot. He was not like those absentee leaders who would rather stay in Tokyo and send out occasional orders. While he worked in China he came into increasing contact with the military, especially with those sections of the military which were closely devoted to the cause of Japanese interests on the Asiatic mainland. The characters he associated with in such circumstances and the situations he was called upon to deal with often put him to the tests from which he emerged the better and the larger for the experience. If his eyes at times turned to the political stage of the capital, he knew how to abide his time and how to profit himself from whatever opportunity that came by.
Mr. Kaya's mind, if anything, leans toward the political rather than the financial field. It is not unnatural that his sanguine temperament tends in that direction. Nor is his mind closed to ambitious thoughts. Unlike his successor, Mr. Sohtaro Ishiwata, he was not born to a family of particularly high descent or renown. Favoured by no accident of birth or fortune, he started on his official career, as hundreds of others do, plugging his way for every rung of the ladder and fighting to hold what he has attained. Because he comes from the ordinary class he understands its mind and temper. His outlook on life is perfectly adjustable to that of any ordinary man. He can be just
as at home out on a sports field as at the ringside of a wrestling tournament. He seems to bestow little thought on his outward appearance. In this respect he is quite unlike many of the bureaucracy. When one day he paid a visit to the late Baron Korékiyo Takahashi staying at his villa at Hayama, he alighted from the train at the station and found a taxicab. But the driver, casting a suspicious eye on the would-be customer, refused to take him. Mr. Kaya was at the time director of the Accountant Bureau. The driver either failed to discern any sign of such dignity in him or found his physical dimensions by far too expansive and out of proportion with the limited space of his superannuated vehicle. Those who know Mr. Kaya think that the wise driver had a two-fold reason for his refusal.
It would not be easy to classify Mr. Kaya under any particular type. But his nature is cheerful, a trait no doubt due to the sunny seaboard country of Chugoku in which he was born. His buoyant spirit seems to bear him through almost any sort of trial or hardship. Such a character naturally refuses to look on the shady side of things. What is perhaps more important is his scorn of cant and pose which accounts for his popularity with the general populace.
He is a good conversationalist. Apt expressions and effective figures of speech come to him easily. He is a good speaker because he can speak in a language easy to understand and in a manner directly appealing to all minds. Whatever subject he may take up he can always make it clearly intelligible. Above all, he is convincing and, when he chooses, he can be persuasive. He has steadily improved as a lecturer and public speaker. In his power of appeal he may favourably compare with those who have received the best training in the field of politics. When a meeting was recently held, under the auspices of the National Service Association, to hear ministerial and other authoritative lectures on current topics, Premier General Tohjo and Mr. Kaya were thought the most successful of all the speakers on that occasion. No less successful was Mr. Kaya when he recently conducted a free discussion party which was broadcast.
Thus by steadily improving himself, Mr. Kaya seems to have acquired that art of public speaking which is an important asset of statesmanship.
Since the beginning of the Pacific war he has imposed upon himself a very strenuous programme. From eight o'clock in the morning till midnight he keeps himself on duty at the ministerial office. But for his physical vigour and abundant energy, he would not be able to stand such strain very long. With the success of Japanese arms on all fronts, Mr. Kaya, as Minister of Finance, is called upon to assume responsibility for an economic war for material resources as the corollary of the armed contest in progress. His plan for this economic war and its aim at economic construction embracing greater East Asia have been revealed at the present session of the Imperial Diet. From his speech on financial policy before the legislature and from what he has stated in reply to interpellations there, it may be gathered that the financial and banking policies of which he takes the leadership are to be directed along quite new lines in conformity with the unprecedented character of the war requirements. For instance, with regard to national currency, the existing regulations of the Bank of Japan are to be displaced by a system of controlled currency. This scheme now before the Diet in the form of a bill for revision of the Law of the Bank of Japan is so designed as to equip and enable the same bank to function as the central banking institution of the country which is taking the leadership of countries in the co-prosperity sphere of greater East Asia. Under the proposed plan the Bank of Japan is completely to abandon the gold basis on one hand and, on the other, to extend its scope of operation to the matters of providing industrial capital, direction of the money market, exchange transactions and development of credit facilities. In other words, the bank is to play an important part as the centre of the new financial sphere proposed for greater East Asia upon the basis of the yen and secure on its independent basis the regulation of large-scale exchange operations within the same area. In the southern area Japan is to circulate military notes which in each case are
issued in terms of the currencies of the countries in which they are circulated. These notes are to be placed under the control of the Chest for Southern Region Development, the new financial organ, charged with the management in southern countries of the new military currency by adjusting it to local conditions with regard to advance of Japanese arms, restoration of peace and revival of industrial activities. In simpler language, this proposed financial organ is to regulate the circulation of military notes in southern countries and also to provide capital funds for the development of material resources there. This financial enterprise is to be launched in the form of a corporate body with a capital of ¥100 million to be provided by the Government. In view of the scope of activity proposed, this capital may appear too modest. But, according to the plan, the Chest for Southern Region Development, as its work extends, may draw upon the fund carried under the Extraordinary Military Expenditure Special Account. Thus the new financial institution will be in a position to extend its operations to the Philippines, British and Netherlands Borneo, the Netherlands East Indies and any other part of the southern area, as occasion may arise.
In addition to the plan mentioned above, the Ministry of Finance has proposed to the Diet a plan for a central organ for wartime monetary regulation. Through this proposal the present Minister of Finance intends to set up a new structure for financial control, thus settling a long outstanding question on the basis of the principles embodied in the Financial Organizations Control Order and the Financial Systems Regulations Order, both of which have been approved by the Council for Investigation of National Mobilization.
Mr. Kaya, upon his assumption of the Finance portfolio in the present Tohjo Cabinet, publicly expressed to the effect that he would not approve of any idea of introducing control for the sake of control; he would avoid friction and lay the main emphasis upon accomplishment in fact rather than planning in theory; and, if necessary, he would discountenance
friction for the sake of new methods.
If the Minister of Finance is true to his word, he will no doubt go on with his plan for the development of a financial structure adequate for the defence and security of greater East Asia, with unwavering mind and unshakable faith which the quality of his undertaking demands. And those who know his dynamic force and political acumen place confidence in the outcome of the mission upon which he has embarked as a popular statesman.