POLICIES & PRINCIPLES: Down to Size?

How great a reduction in Japanese industry would be necessary to make Japan permanently harmless? How much industry must be left in Japan to support its 77 million people? U.S. reparations, experts last week were a long way from the answers to these related questions, partly because the Japanese were not being helpful in furnishing accurate information on which the answers could be based.

Serious discrepancies had already appeared in Japanese financial and industrial reports to General MacArthur's headquarters. Example: silver bars. When U.S. officers found an unreported hoard of silver concealed under a pile of steel scrap in a factory, the Japanese explained that they had not meant to falsify the questionnaire on precious metals; they thought the military government had asked them to report on stocks of quicksilver.

Accurate information about remaining factory capacity was infinitely more difficult to assemble. Current production figures were no help. Disorganization, public apathy, strikes were so widespread that the Japanese had to resort to typically

American methods of encouragement.

After a quick look at Japanese industry, Reparations Commissioner Edwin W. Pauley concluded that present Japanese capacity could be heavily cut and still remain larger than it was before Japan attacked China in 1931. He recommended a reduction in steel production to 2,500,000 tons and complete elimination of ball-bearing manufacture. He thought some caustic acid plants, solvay soda ash plants, and coal-burning electric generators could be picked up and removed from Japan.

The Pauley statement dovetailed with the Chinese view on reparations; in spite of its immediate need for finished products, China would rather take Japanese machinery and thus reduce the chance of a subsequent Japanese revival as a power in east Asia.

Compared to all previous reports, Pauley's estimates of how much could or should be taken from Japan were high. It will be good news for reparations claimants if Japan has as much left— after the loss of Manchuria and Korea, plus heavy bomb damage—as Pauley's recommendations indicate.