Section IV 



HAW MATERIALS AKD JAPAH'S PEACETIME ECOKOMY 



1. JAPAN'S ROAD BACK - TO WHAT? 



a. Both the Allied Forces and the Japanese government have a 

 problem vhich complicates every plan and enters every decision. What is 

 the character of the economy toward which Japeifa should be directed? 

 Japan is on the road back - but back to what? 



2. JAPAN'S FUTURE ECONOMY 



a. A partial answer to those questions will be provided at the 

 peace table, but em accurate final answer depends on still other features 

 which will be difficult to predict at any tine. Both types of compli- 

 cating factors are illustrated even in so simple a decision as the 

 determination of what and how much of a given commodity Japan needs to 

 "sustain" her economy. Among them may be ment^ionedJ 



(1) Possible changes in the rate of population growth and 

 rural-urban population shifts 



(2) The difference between prewar and postwar peacetime 

 requirements for consumer goods and raw materials 



(3) The degree to which Japan's economy will be de-industri- 

 alized 



(4) The economic effects of the geographic dismemberment of 

 Japan (the lose of Korea, Formosa, Karafuto, and 

 Manchuria) 



(5) The fluctuations of an adjusting economy to postwar 

 conditions 



3. POTSDAM DECLARATION 



a. In spite of the unpredictable aspects a rough approximation 

 of Japan's future economy can be outlined. One of the guide posts in 

 this respect is the Potsdam Declaration (26 July 1945) , which contains 

 this paragraph: "Japan shall be permitted to maintain euch industries as 

 will sustain her economy and allow the just reparations in kind, but not 

 those which would enable her to rearm for war. To this end, access to, 

 as distinguished from control of, raw materials shall be permitted. The 

 eventual Japanese participation in world trade relations should be per- 

 mitted". 



45 



