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H. J. Timperley january 1934 Japan in Manchukuo H. J. Timperley Volume 12 • Number 2 The contents of Foreign Affairs are copyrighted.©1934 Council on Foreign Relations, Inc. All rights reserved. Reproduction and distribution of this material is permitted only with the express written consent of Foreign Affairs. Visit www.foreignaffairs.com/permissions for more information. JAPAN IN MANCHUKUO By H. y. Timperley now over a IT is year since Japan officially recognized Man a to co chukuo, signing protocol under which she agreed operate with the new state in the maintenance of its national to security. During this period, organized opposition the estab new lishment of the government has been crushed; Japan has to been able consolidate her position and initiate plans for the own development of the country in harmony with her economic too to and strategic needs. Although it is early yet make confident we assess predictions regarding the future, may progress and examine the situation as it stands today. In view of the war over not a clouds still hanging Manchuria this may be profitless task. to come The first fact be grasped is that Manchukuo has to to stay. Before long the Japanese may possibly find it expedient a a bring about change in the form of government from nominal as at to a republic, present, limited monarchy, with Mr. Henry Pu Yi restored asManchu Emperor; but nobody believes that the Japanese have the least intention of relaxing the firm control now exercise over the destinies. they country's Manchukuo's vaunted independence exists only in the imagi at nation of Japanese propagandists. As present constituted, the amounts to more a Manchukuo "government" little than polite to fiction invented obscure the fact that Japan has gone in for a imperialism in big way. Japanese officials occupy the key posi tions in the Manchukuo administration and work under direction turn of the Kwantung Army, which in is subordinate, ostensibly at least, to the Japanese Imperial General Staff. Mr. Pu Yi and team his of Manchu and Chinese ministers, commonly spoken of in Manchuria as "the are over phantom cabinet," entirely shadowed by their so-called Japanese "advisers," who in fact constitute the real executive country's authority. an Last spring the Manchukuo Government adopted economic i. program. It indicated the following basic policies and aims: one To prevent any class from monopolizing the benefits arising resources from the exploitation of natural and from industrial 2. To exercise national control over development. important economic activities and to devise rationalization measures. 3. Council on Foreign Relations is collaborating with JSTOR to digitize, preserve, and extend access to Foreign Affairs ® www.jstor.org 296 FOREIGN AFFAIRS To observe "the of the Door and principle Open equal oppor to tunity," to encourage the investment of foreign capital, and In utilize foreign technical skill and experience. line with these has laid down definite governing principles the government plans for the economic organization of the country, for the develop ment of industry, and for the construction of public utilities. in Progress is being made several directions. One of the most notable developments has been the progress towards the establishment of financial order. Among the gravest was scandals of the former Chinese r?gime the way in which on son Chang Tso-lin and later his and successor, Chang Hsueh for of liang, manipulated the currency the purpose bolstering up was manner. ac their private treasuries. It done in this Having a nota quired virtual monopoly of Manchuria's foreign exports, bly the soya bean, they paid the Manchurian farmer for his notes own known as produce with of their manufacture, feng to for piao. They then sold the produce the foreign distributors The emission of issue after good money, which they pocketed. issue of notes had the natural result of enormously lowering the a to value of the fengpiao. Faced with situation similar that which confronted the German Government in 1924 after the ruin of the old mark, the new Manchukuo Government made one of at rates its first tasks the redemption of this paper currency fixed that the of of exchange. It is officially claimed through agency the Central Bank of Manchukuo, established on June 15, 1932, a of Manchukuo the with capital 30,000,000 yuan, government 60 of the outstand by the end of last July had redeemed percent the end of the ing paper issues. It is hoped that by June 1934 variegated forms of currency previously circulating throughout new cur Manchuria will have been superseded entirely by the as on rency unit known the "Manchukuo yuan," based the silver a ex standard, which has already become recognized medium of this much change. Though deplored by the exchange speculators, needed reform is warmly welcomed by farmers and merchants it has done much to encour throughout Manchuria, where already age trade by eliminating the tremendous currency fluctuations under the old which hampered the transaction of business system. most But it is to railroad development that interest attaches. to For nearly thirty years Japan has been working steadily adapt the Manchurian railroad system to her own economic and efforts in direction have strategic requirements. Her this brought JAPAN IN MANCHUKUO 297 her into frequent collision with the rival aspirations of the Chinese on on the one hand and the Russians the other. Attempts by the to late Chang Tso-lin build lines in competition with the Japa nese-owned South Manchuria Railroad, and his refusal to build were others linking up the Manchurian and Japanese systems, recent conflict. major factors in precipitating the Sino-Japanese a Since Manchukuo was established Japan finds herself in posi tion to proceed unhampered by Chinese opposition. She has also an shown increasing disregard of Russian interests. The publicly announced plans of Manchukuo provide for the construction of 4,000 kilometers of new lines within ten years. new The first railroad to be completed since the Japanese army a assumed virtual control of Manchuria in September 1931, is stretch of about 200 kilometers from Tunhua to the Korean bor on der (see railway map page 294). This line, opened for traffic connect new now in August last, will with the port of Rashin, on under construction the Korean coast, and by joining up with a more the Korean railroads will provide direct communication to between Japan and Manchuria. The Chinese refusal sanction to the completion of this railroad did much quicken Japanese new impatience with the former Manchurian r?gime. Another access to line, due for completion by the end of 1933, will give the fertile country lying north of the Chinese Eastern Railway. This now some west is the line being built from Lafa, 50 kilometers ward of Tunhua, to Harbin, where it will connect with the Hulan Hailin-Koshan-Tsitsihar line. When it has been completed, and new now across when the bridge being built simultaneously the are com Sungari River has been finished, trains which at present to at to pelled trans-ship their goods Harbin will be enabled carry to coast. their inland freight direct the Korean Construction has on also been started another line running northward from Yenki, to about 60 kilometers eastward of Tunhua, through Hailin an center on Sanhsing, important soya bean the Sungari. This railroad (which will take several years to complete) will tap ad can ditional regions, the products of which then be brought down on to ports the Korean coast. Japanese railroad officials claim that these various improvements in their system will have the to status a effect of reducing the Chinese Eastern the of branch line. It is significant that by the completion of the line from to to Changchun the Korean border the haul from Osaka Harbin has been reduced from 2,800 kilometers (via the old Dairen route) 298 FOREIGN AFFAIRS to a 2,060 (via northern Korea), saving of 740 kilometers. Plans are now to a new under way in Japan establish steamship line to or on from the Japanese port of Niigata Rashin Yuki, the a two Korean coast, making possible saving of days in the journey to from Tokyo Harbin. The contracts for the construction of the new railroads have to been given exclusively the Japanese-owned South Manchuria man Railroad Company, which also has been entrusted with the to agement of the existing system. According Mr. Michio Izawa, vice-director of the general railroad directorate established at on man Mukden March 1, 1933, the policy to be followed in the 1. agement of the railroads will be: To promote cooperation be tween Japan and Manchukuo for defense purposes under the 2. To the on an Manchukuo-Japan protocol. reorganize railways ensure efficient basis, eliminating futile competition. 3. To repay to ment of existing indebtedness Japanese interests (notably the South Manchuria Railway), totalling 130,000,000 gold yen, and of loans made in respect of railroads now under construction or the construction of which is pending. Already considerable head way has been made in the rationalization of the 6,000-kilometer system. A through train and ticket service has been established. It is expected that the nine varying freight schedules will have been unified by the end of the present year. It is safe to predict menace can that before long, provided the bandit be removed, the South Manchuria Railway will have the Manchukuo railway a system operating with degree of efficiency inconceivable under the former r?gime. ( Rashin is destined to become the main outlet on the Korean to coast, and that end elaborate harbor construction has already started there. It is estimated that within four years Rashin will be able to tons of handle 3,000,000 cargo annually, and 9,000,000 to tons within ten years.
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