Programme for Mobilization of Materials for 1940
Board of Planning
TAKING into consideration the changes in the international situation and other circumstances, a temporary programme for the mobilization of goods was enforced from April to June, while a standard plan for mobilization of materials for the whole year of 1940 was drafted with all speed. The latter was decided upon in conjunction with another relating to foreign trade at a Cabinet meeting held on June 29. The Materials Mobilization plan may be considered the basis upon which Japan's national economy is being made to operate, since it provides for the controlling and regulating of the supply and distribution of as many as two hundred and fifty varieties of the more essential goods. Its application is indeed of the greatest consequence in the execution of national policy and in its effect upon the people's livelihood.
General Condition of Supply of Materials
When we examine into the conditions surrounding the supply of materials, we find that their source lies mostly in domestic production, and where a deficiency exists, this may be complemented by imports from Manchoukuo and China, or from such countries as Great Britain and the United States. Despite the fact that domestic production was faced with many obstacles last year due to the drought and shortage of coal and electric power, the actual returns for this year may safely be expected to be more favourable in keeping with the greater progress made in the execution of the plan for the expansion of productive activity since 1938. The unprecedented dryness and other adverse influences completely negatived in certain localities the increase that had been made in industrial equipment with that end in view. Nevertheless the actual results achieved, save in certain exceptional cases, were a distinct advance upon the previous year. As various measures have since been taken to counteract any unforeseen calamities, and as a considerable number of factories which had been under construction have now been completed and are in operation, a further augmentation in production may be counted upon during 1940.
A considerable increase in the volume of imports from Manchoukuo
and China can also be expected, as 1939 was indeed a difficult year for those countries affected as they were by drought and flood over large areas. The European war, which has brought about an inordinate rise in prices generally, and the policies adopted by the belligerents and several neutral nations prohibiting or restricting the exportation of various classes of goods in view of the requirements of national defence have removed all opportunities for purchases by Japan in these markets. Imports from these foreign countries therefore can hardly be expected to rise.
General Condition of Demand
It is clear that under the present situation, the repletion of armaments by Japan, the expansion of productive power, construction work on the Asiatic continent and a number of national undertakings of vital importance are giving rise to unusual demands. The quantity of materials and goods required in connection with each of these undertakings is considerable, and more so when the trend of the world situation revolving around the European war is taken into consideration. Under these circumstances, it is only by a proper adjustment of supply to demand that the maximum utility can be obtained out of the materials at hand. And for this reason the basic principle to follow resides in the expedient distribution of essential requirements.
Basic Policy Governing the 1940 Plan
It is in such a spirit that the materials mobilization plan for 1940 has been formulated with a view to accomplishing the object of the China Affair while assuring in every way the defence of the country by such measures as will meet every new development in the international situation. The plan resolves within itself the attainment of these five main objectives : namely, (1) the meeting of every demand for military supplies, (2) the expansion of productive power to the fullest extent, (3) the early completion of constructive undertakings on the continent, embracing Manchoukuo and China, (4) the augmentation of importing capacity, with special emphasis on the promotion of export trade, (5) the assurance of the minimum essentials for the livelihood of the people.
1. Satisfaction of Military Requirements
With the country now engaged in large-scale hostilities on the continent, it is natural that enormous quantities of military supplies are required. Moreover, developments in the international situation
have rendered it urgently necessary to replenish armaments for national defence. As the greatest economy requires to be practised here none the less, the authorities concerned are sparing no efforts to meet the situation while having in mind the country's security.
A greater part of governmental requirements other than those for defence consists of such materials the Railway, Communications, Agriculture, Forestry and other Departments find of immediate need. In meeting these requirements, the principle of giving priority according to importance will also be applied.
2. Expansion of Productive Power
The expansion of productive power has for its purpose the expediting of development in those industries particularly related to national defence or which aim at bringing the country's economic structure to the level of self-sufficiency. This particular phase is now in its third year and calls for unusually large quantities of materials.
On the basis of the valuable experience gained last year and after careful study, the authorities concerned have arrived at a decision upon the most effective method of operation for the current year. The policy of promoting efficiency in essential industries will be further strengthened and the fullest utilization made of all productive resources ; construction work on factories in the course of erection is being expedited and measures have been taken to secure from industry the brightest possible technical efficiency with special emphasis on those basic industries producing iron, steel, coal, light metals, liquid fuels, etc. All efforts in this connection will be concentrated upon the attainment of self-sufficiency or the securing of adequate supplies of essential materials and goods.
In view of the actual situation of Japan, Manchoukuo and China in the matter of resources and the contrast that exists in the economic development of these countries, it is beyond doubt that, to afford the best results in the expansion of productive power, it is essential that their economics be treated as one. Moreover, a consideration of the recent changes in the international situation shows the urgency there is for Japan to free herself from her economic dependence upon regions outside of East Asia.
3. Policy Governing Construction on the Continent
It is in accordance with the general principles outlined above that steps have been taken to assure the supply of those materials required for construction work on the continent. The Five-Year Industrial Development Plan now operating in Manchoukuo, is
closely linked to the expansion of productive power in Japan. European conditions having unfavourably affected the execution of the said Plan during the current year, Manchoukuo will be compelled to rely upon Japan for many essentials, especially materials required by the iron, steel, coal, liquid fuel and light metal industries.
As regards China, every effort is being directed toward the development of such important resources as coal, iron, steel, cotton, salt, etc. ; and to assure the proper distribution of materials necessary to this expansion, transportation facilities are being improved.
4. Promotion of Export Trade
As matters stand today, Japan is compelled to import considerable quantities of raw materials from foreign countries to meet its military requirements or the needs for the expansion of productive power, payment for which must be made either in gold or in foreign currency. For this reason the domestic production of gold is being greatly encouraged. Meanwhile the only other course open to her is to promote export trade through the removal of those obstacles which may impede the production of articles of export. The smooth functioning of the supply and distribution of raw materials and production goods, labour, electric power, etc. is of primordial importance in this connection. Special consideration has therefore been accorded in this year's materials mobilization plan to these needs which have been given preferential treatment.
5. Assurance of the Minimum Amount of Necessary Articles
As regards non-military requirements, the range of which is indeed very extensive, embracing as it does those materials indispensable to the manufacturing, mining, agricultural, forestry, stock-raising and marine products industries, as well as the necessities of life, every care is to be taken to determine their supply in the right degree so as not to defeat the primary purpose of the Materials Mobilization Plan which is to assure the maximum requirements for national defence.
The supply of these non-military goods comprising mineral ores, crude oil, fertilizers, work-clothes, work-gloves, socks for outdoor work, agricultural, forestry and marine industrial implements and construction materials for workmen's houses must in no wise be impeded so as not to retard or reduce production in the industries named. Measures have therefore been adopted to greatly increase these supplies for 1940. The deficiency in potassium, resulting from the war in Europe, the main sources of Japan's supply, will be
counteracted by an increase in the domestic output of sulphate of ammonium and phosphates. The shortage may also be remedied to some extent by the use of ashes of plants and trees and by importing nitrate of potassium.
In respect of clothing, foodstuffs, sanitary articles and medical supplies—all necessities of life—the minimum requirements indicated by past experience will be secured in order to assure a simple but healthy life to the nation in keeping with wartime conditions. A comprehensive scheme for the adjustment of supply to demand has been devised and thoroughgoing measures are being taken to regulate their production, distribution and consumption, thereby maintaining stability of the nation's livelihood.
Other consumption goods not considered urgent or wholly unnecessary will be subjected to restriction in a more drastic form than has hitherto obtained. Not only from the viewpoint of economy but in order to enhance the people's morale, luxuries of any kind must strictly be dispensed with. The Government has, therefore, decided to prohibit or restrict by laws or ordinances their manufacture and sale, as the case may be.
In view of the kaleidoscopic changes to which the international situation is liable, it will be necessary to make every provision to meet the inevitable effect which these changes will have on the materials mobilization plan in so far as the importation of materials is concerned. Under the circumstances it has been decided to give the Plan a certain elasticity by subjecting it to a revision every quarter so that supply can be adjusted to demand as the need may arise.