The Waikato Times MONDAY, FEBRUARY 14, 1938 COUNTING THE COST

Waikato Times, Volume 122, Issue 20423, 14 February 1938, Page 6

The Waikato Times MONDAY, FEBRUARY 14, 1938 COUNTING THE COST

Some weeks ago the Minister of Finance assured the Japanese Cabinet that the country could carry the burden of a prolonged campaign in China. \ ery little reliable information as to the policies and the resources of either country has been made available, but Mr. W. H. Chamberlin, one of the recognised authorities on Far Eastern questions, has stated that already the Japanese war appropriations, totalling about £150,000.001) exceed the entire cost to Japan of the war with Russia in 1004-05. “Such appropriations," he said, “coming as a sequel to six unbalanced annual budgets, strengthen the inflationary trend in Japanese finance and foreshadow a lowered standard of living, as a result of diverting such a large part of the national spending into unproductive military channels.” The unexpected resistance offered by the Chinese forces has made it necessary for Japan to use many large factories for the manufacture of munitions, and this must mean lessened capacity to compete in the markets of the world. For the duration of hostilities at least all prospect of a market in China has vanished, while right through the East Chinese traders have united to boycott Japanese goods. Much shipping has had to be diverted from trade routes to the carriage of men and supplies to Chinese ports. The authorities at Tokio still hold a fairly large gold reserve, estimated by Chamberlin at about £80,000,000.“ A large proportion has been earmarked as a reserve for the note issue, and at the commencement of the “Chinese incident” a fair amount of gold was shipped to the United States. _ More could be shipped but it is said that the Japanese leaders would adopt that plan very reluctantly “because of the necessity for being prepared for some possible and more serious conflict than the war with China.” The imports have been subjected to drastic curtailment, and what may be termed luxuries have been placed under an embargo. It is hoped to save a very large sum by that means, but it implies a possible shortage of raw material for the industries. Japan produces no rubber or cotton and only one-tenth of the iron and oil consumed annually, so that to maintain her industries overseas purchases must be continued to some extent. It may be an indication of economic limitations to have the resources of Manchukuo placed on a war basis. This has been done by a general mobilisation Act, and the intention may be to afford Japan a measure of assistance. Any' return would be pleasing to Tokio for the cost of maintaining a very' large army in the puppet kingdom has been a costly matter. Both belligerent countries must be eating up their material resources at a great rate, and the prospect of aid from other countries must be very small indeed. Japan’s co-signatories to the anti-Comintern pact cannot afford to make loans, and the neutral states apparently have no intention of doing so.