First published in 1982 by Garland Publishing, Inc.
This edition first published in 2019
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1982 Ann Rasmussen Kinney
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ISBN: 978-1-138-48274-6 (Set)
ISBN: 978-0-429-42825-8 (Set) (ebk)
ISBN: 978-1-138-36911-5 (Volume 21) (hbk)
ISBN: 978-0-429-42886-9 (Volume 21) (ebk)
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Bibliographical note: this facsimile has been made from a copy in the Columbia University Business Library.
Copyright 1982 by Ann Rasmussen Kinney
All rights reserved
Library of Congress Cataloging in Publication Data
Kinney, Ann Rasmussen.
Japanese investment in Manchurian manufacturing, mining, transportation, and communications, 19311945.
(China during the interregnum, 19111949)
Originally presented as the authors thesis (Ph.D. Columbia University, 1962) under the title: Investment in Manchurian manufacturing, mining, transportation, and communications, 19311945.
Bibliography: p.
1. Investments, JapaneseChinaManchuriaHistory.
2. InvestmentsChinaManchurianHistory.
3. Manchuria China)Economic conditions.
I. Title. II. Series.
HG5790.M36K561982332.67352051880-8835
ISBN 0-8240-4690-0AACR2
For a complete list of the titles in this series, see the final pages of this volume.
All volumes in this series are printed on acid-free, 250-year-life paper.
Printed in the united States of America
INVESTMENT IN MANCHURIAN MANUFACTURING, MINING, TRANSPORTATION AND COMMUNICATIONS, 19311945
Submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy, in the Faculty of Political Science, Columbia University
Ann Rasmussen Kinney
1962
Manchuria was for all intents and purposes a puppet state of Japan from 1931 until the end of the Pacific War in 1945. During this period, the Japanese undertook to develop the economy of the area to further strengthen the economic basis of the Japanese Empire. This period, at least through 1943, witnessed the rapid growth of the economy under centralized planning and control. Large amounts of statistical and descriptive material relating to these years, usually termed the Manchoukuo Period after the name of Japans puppet state, are available to the researcher with some facility in handling Japanese language materials. It is difficult to think of a comparable underdeveloped area where such a profusion of reasonably reliable data covering a fifteen year period is in existence.
Manchurian investment had to be maintained at a high level if the goals of the Japanese economic planners were to be attained. The financing of this investment was a major preoccupation of the economic authorities throughout the period. The capital requirements were to be met from domestic as well as foreign sources. Given the high rate of planned investment and the underdeveloped character of the Manchurian econoamy, one could not expect substantial amounts of capital to be mobilized domestically through voluntary savings. Had adequate amounts of foreign investment been available, the planned rate of investment could have been sustained without undue difficulty. However, lacking this, the economy was thrown back on its own resources and had to accept the alternative of either reducing the planned rate of investment or meeting the financial targets spelled out by the higher rate of investment through involuntary savings.
In fact, a high rate of investment prevailed during these years. Since investment in heavy industry, transportation and electricity was an important component in this investment, the financing of industry is the subject chosen for this study. Estimates will be made of actual Investment in current monetary units. This reliance on financial data will necessitate the construction of some sort of investment deflator if any idea of real investment is to be obtained.
A great deal of attention will be paid to industrial capital by source and type. The Japanese are usually credited with providing the bulk of investment funds in Manchoukuo. However, substantial amounts were collected within the area itself. Estimates of the amounts provided from domestic sources might throw some light on the amount of investment capital which can be mobilized within low income areas. Data are also presented on investment by component type such as retained earnings, paidup capital, bonds and bank loans. This breakdown will facilitate the analysis of the relationship between the different investment components on the one hand and economic and institutional factors on the other.
The course of inflation during the period will be traced and its relationship to industrial investment studied. In a low incone area such as Manchuria, voluntary savings are generally insufficient to finance the desired level of investment. As a result, the economic authorities in underdeveloped areas often resort to financing of an inflationary nature, such as printing money for the purchase of company bonds by the Government. Industrial investment was not, however, the only cause of inflation; military expenditures and severe price rises in North China also contributed to inflation in Manchoukuo.
The value of Inflationary financing as a source of capital formation has been hotly debated in recent years. The negative arguments which predominate stress the economic distortions and foreign trade problems which arise during the course of Inflation. However, in Manchuria inflationary techniques prevailed after 1939. At the sane time, substantial Increases in productive capacity and production tock place. Thus, the Manchurian experience may throw some light on the volume of capital available through inflationary processes, the point up to which Inflationary financing can successfully be carried, and the institutional factors necessary to make such a policy effective in increasing real investment. Needless to say, these conclusions should be applied to other underdeveloped areas only after taking account of the peculiarities, of the Manchurian economy.
