JAPAN’S WAR COSTS

Greymouth Evening Star, 7 August 1946, Page 8

JAPAN’S WAR COSTS

SOLVING FINANCIAL ' PROBLEM

NEW YORK, Aug. 6.

“Currrent Japanese Parliamentary debates on the Budget strongly indicate the Government intends to solve some part of its tremendous financial problem by virtually repudiating the interna]-debt and fixing the war cost by a large capital levy on those still retaining any liquid resources,” says the Tokio correspondent of the New York Times. “The Minister of Finance (Mr. Ishibashi) told the budget committee that the Government proposals include a 90 per cent, devaluation of Government bonds as well as a bank readjustment plan under which five large banks will lose from 20 to 50 per cent. of. their loans.

“Mr. Ishibashi assured the committee that although the proposals entail wholesale adjustments, no bank will fail. Pointing out that prices already had increased tenfold since the surrender, Mr. Ishibashi said that on this basis bonds formerly worth 109,000,000,000 yen, were now worth only 10,900,000,000 yen,.with a proportionate interest reduction. “Thus, although Mr. Ishibashi insists on the necessity for the retention of some interest payments in spite of a Left Wing demand for outright cancellation, a few more months of inflation would virtually cut the real value of the bondholders’ interest to zero. Whether the Yoshida Government will’ be able to rescue Japan .from threatened financial chaos partly depends on the success of the proposed tax measures or whether. Japan prefers 'to turn to other parties with more radical cures.”