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 OSAKA PREFECTURAL GOVERNMENT

November 16, 1950

I hereby pay my hearty respects to you who have came to Japan again in order to review the countermeasures to be taken for the future of Japanese economy which is affected by the change of international situation after the outbreak of Korean War. I quite agree to the fundamental idea you have expressed recently in you statement on the economy of our country. However, from the standpoint of Osaka, an important centre of Japanese economy, I would entreat you to give special consideration to the following requests which I hope you would materialize in accordance with the real state of the industrial economy of this districts.


 * 1. Approval of increased issue of necessary currency amount is hoped.

You are stressing anew that the disinflation policy should be strictly followed without surrendering to the inflational trend now prevailing in different parts of the world. However, speaking of the effect of the rise in international prices, Japanese prices are being affected automatically by the high price of dollar economic zones, because of the yen-dollar rate being fixed. The reduction of cost by rationalization is possible to some extent in Japan, but the fact that our greater part of raw materials and foods depend on foreign countries would make it very difficult to cover the reduced cost, if the rise in international prices turns out defavorably. It is impossible to control forcibly the effect of international high prices by means of currency policy (prohibition of increased issue of currency). Moreover, following the special demand due to Korean War as well as the active exportation caused by the international high price, the currency amount necessary for the normal movement of economy is increasing. I therefore hope for you approval of the increased issue of currency to meet such increase.


 * 2. Such means of capital accumulation as unregistered deposti [sic] system or discounted Industrial Bank bonds etc. is desirable for accumulation of profits from special demand.