GIVEN Japan's continuing and portentous activities in China proper, we may do well to attempt casting up Japan's account in Manchukuo. Paradoxically the situation in Manchukuo itself has little to do with the question of profit or loss for Japan. The answer is not to be found there. Manchukuo might be pacified and its Chinese inhabitants reconciled to their lot; its government finances might be in good order, its trade flourishing and its resources on the way to being developed. All this might be true (which it is not) and still prove nothing with respect to the success or failure of Japan in Manchukuo. The test of that is to be found not in Manchukuo but in Japan. It is to be found in the facts of Japan's financial situation, facts like the following:
|National expenditure, 1930-31||Yen||1,588,000,000|
|National expenditure, 1937-38||2,870,000,000|
|Military appropriations, 1930-31||Yen||470,000,000|
|Military appropriations, 1937-38||1,400,000,000|
|National tax revenue, 1930-31||Yen||835,000,000|
|National tax revenue, 1937-38||1,300,000,000|
|National debt, 1930||Yen||6,000,000,000|
|National debt, 1937||10,500,000,000|
There are other revealing comparisons. While the volume of Japan's industrial production increased by 92 percent from 1931 to 1936, and the quantity of exports by 46 percent from 1933 (when Japan started her commercial bound forward), the national debt increased by 75 percent and taxes by one-third. The test of Japan's failure or success in Manchukuo lies in facts like that, and in the fact that the excess of Japanese imports over exports for the first half of 1937 was Yen 600,000,000, nearly double that of 1936, with the result that Yen 250,000,000 has had to be shipped to America in three months of the current year, governmental restrictions have already been imposed on exchange and imports, and more stringent control is projected as indispensable for the protection of the currency.
The answer to our question lies, further, in such statements as the following made by Eiichi Baba when he was Minister of Finance in 1936: "People speak of our present conditions as those of semi-wartime economic preparation, and I think that is on the whole an apt expression of the situation." For whether Manchukuo is profit or loss for Japan is determined, not by what Japan has done in Manchukuo but by what Manchukuo has done
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