b. The declaration, while general in content, clearly points to 

 the fact that despite the limitations to be put on Japan's economy, it 

 will be permitted to recover from its present low level. To do otherwise 

 would be to condemn millions of Japanese to a below subaistenca level, if 

 not out-and-out starvation. When Japan's economy was purely agricultural, 

 it supported a rather stable population of about thirty cillion people; 

 the addition of forty million in less than a century has been made possible 

 mainly by the growth of industry and foreign trade. 



4. STUDIES Oy JAPAN'S FAST FHODUCTIOH AKD THADE 



a. In order to impart more specific meaning to the general 

 principles laid down by the Potsdam Declaration, perhaps the moat useful 

 approach is the study of Japan's prewar basic economic features. This 

 method may serve as a useful reference to the basic question under con- 

 sideration: What is the economy toward which Japan should be directed? 



b. One method of analyzing Japan's economy is by means of the 

 "pie-rcharts" reproduced here (See Plates 15 - 17). These are designed 



as illustrations for economic studies, each one representing a particular 

 condition in the early 1930 's. These studies do not offer definitive 

 answers to problems facing the Allied Powers in shaping Japan's postwar 

 economy, but they are e«BentialB in formulating the answers. 



c. Figure 1 (Plate. 15) describes the material composition of 

 Japanese national wealth and Figure 2, the occupation of her people in 

 1930. These comparisons are basic to an understanding of Japan's past 

 economic attainments as well as its future aspirations. 



d. Figures 3 and 4 (Plate 15) show the relative position of 

 Japan in the world picture of the two most important food crops, rice and 

 wheat. It is safe to assume that Japan's respective shares in world 

 totals are not likely to change much in the immediate future; however, 

 the output of these crops in Japan is likely to be larger than in the 

 prewar years. Japan will not be in a position to import as much food as 

 was the case in the past; she will have to rely upon a larger domestic 

 production for a still greater share of food consumption. 



e. Industrial crops are illustrated in Figure 1, Plate 16 (tea) 

 and Figure 2, Plate 16 (raw silk). Japan produced an average of about 

 50,000'metric tons uf tea from 1930 to 1935 and 42,000 metric tons of raw 

 silk. It should be emphasized, however, that the data on silk represents 

 em optimum never to be attained again. In 1929 about two-fifths of 

 Japan's exports consisted of raw silk. This trade was unique in that It 

 did not depend on imported raw materials; but silk exports had greatly 

 diminished by 1937, and they probably will not regain their former ' 

 position in view of the competition from synthetic fibres. 



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