The Waikato Times SATURDAY, AUGUST 14, 1937. A COSTLY BUSINESS.

Waikato Times, Volume 121, Issue 20272, 14 August 1937, Page 6

The Waikato Times SATURDAY, AUGUST 14, 1937. A COSTLY BUSINESS.

The Japanese authorities are said to have authorised votes aggregating £24,000,000 for operations of their naval and military forces in China, but with huge quantities of war material being rushed to. the various danger spots this sum will soon be exhausted. And Japan is not so strong financially that added burdens such as these can be borne without difficulty. Doubtless the wave of nationalism that is sweeping over the country will find expression in support of whatever financial measures are deemed necessary, but it is strange that this expenditure should come so soon after a decision to make drastic alterations in the fiscal policy because of the very heavy adverse trade balance. In the first six months of the year Japan had an adverse balance of nearly £35,000,000, and the gold holdings have dwindled since the Great War brought the Japanese widespread prosperity. Six years ago the creation of Manchukuo was to solve the economic problems of the Empire by giving Japanese industrialists an assured market for their goods and by providing supplies of some raw materials. Unfortunately the expectations were not realised, and some time ago the industrialists complained that the Manchukuans, because of their low standards of living, were able to manufacture goods and sell them in Japan. In the matter of armaments the Japanese should be well supplied. The national Budget of 1931-32 assigned 31 per cent, of the revenue to the Army and Navy, and this year the proportion is 49 per cent. Six years ago the Budget was balanced. This year one-third of the expenditure must be covered by loans, and it is becoming increasingly difficult for the banks and other institutions to absorb the issues. A correspondent in Tokio recently summed up the position in this way: “Japan’s political economic and social life is more and more revolving around the axis of an ever-growing and ever-unsatisfled programme of military and naval preparedness, which threatens to engulf the country’s limited reserves of capital and raw materials and to make inevitable some kind of military State socialism.” People, impressed by the ability of the Japanese to under-sell their competitors in world markets, have overlooked the fact that commodity prices in Japan itself have risen sharply. Between June, 1936, and April, 1937, wholesale prices there moved up by 30 per cent., compared with 22 per cent, in Great Britain and 16 per cent, in the United States.

A correspondent of the London Spectator writing from Tokio recently said of the new Government that it derived additional significance “ because of the difficult, not to say critical, economic and financial situation.” If to this is added the cost of expensive operations in China then the financial problems must rapidly become acute. Unfortunately, as Gunther has stated, “poverty has never prevented conflict. It may make the war hard to carry on, but a desperate country has less to lose by war than the rich countries which oppose it.” Many men well qualified to give an opinion state the Japan’s aim is to tap the natural resources in Northern China and thus obtain essential supplies, really admitting that, in this respect, Manchukuo must have proved an unsatisfactory source, although when the country was seized its resources were said to be almost unlimited. But supplies might prove too costly because the Chinese markets are of vital importance to Japan, and years ago the leaders at Nanking discovered that the trade boycott is a weapon which baffles Japanese policy.