That there should be uneasiness in Japanese business circles over the plan of the Japanese Army to endeavour to control profits in an endeavour to reduce prices is quite understandable. Whether the scheme will-put an end to the Jong disagreement between the army and the capitalists of Japan remains to be seen, though the possibilities are that it will not do so, though it may serve to drive the disagreement underground. 'The military who favour this scheme will in all probability find the problem they have to face rather more difficult than' they appear to think it is at the present time.
one which other nations have had to deal with, and which the Allies: wre facing at the present time, and the finding of a solution Is a matter of very considerable diMeulty. The economic system of any highly organized country, such as Japan, is much too complex for any such simple solution which the Japanese military appear to have in mind to prove effective, The contention of the industrialists that unless economic problems are solved at the fundamental sources of maladjustment no rigid bureaucracy can succeed through arbitrary methods which ignore basic causes, is one which is supported by most economists throughout the world. It has been rightly pointed out that the task of any form of war finance is to reduce popular consumption. Taxation and borrowing do it by taking money out of the pockets of the people before they can spend it. The fact of the matter is that in Japan inflationary increases in prices and the deterioration in the standard of living are inevitable in a system of war financing such has developed, and it is doubtful whether at this late hour the Japanese Army will be able to remedy the trouble, for, now, drastic measures designed to stop inflation, rather than control it may have the effect of throwing the entire economic machinery out of gear. It may bbe possible to control profits, but, if in doing 0 grave interference with the economic life of the country results, a more serious situation than at present prevails may be brought about.
Text read from the printed page and cleaned; old type leaves the occasional error.