MEMO FOR RECORD: (SCAPIN - 1035)
WFM/JMcIH/HGH/gg
10 June 1946
1. Pursuant to the policy set forth in JCS Directive 1380/15, dated 3 November 1945, investigations are being made of concerns which are not on the Schedule of Restricted Concerns, established by SCAP Memorandum AG 004 (8 Dec 45) ESS/AC (SCAPIN-403), subject: "Establishment of a Schedule of Restricted Concerns."
2. An investigation of Kawaminami Industrial Company, Ltd., disclosed the following information:
a. Description and History of the Company: This Company was incorporated in September 1936 with an authorized capital of ¥5,000 000 for the purpose of shipbuilding, coal mining, fishing, and manufacturing of marine products and equipment. Since that time the capital has been increased progressively until it reached ¥50,000,000 (fully paid) in 1942. With net assets of ¥222,000,000, about 5% of the potential shipbuilding capacity, and seven-tenths of one percent of potential repairing capacity, it is relatively small in comparison with other shipbuilding companies such as Mitsui and Mitsubishi. The largest single stockholder is the Kawaminami Family, owning 20% of the shares, with the Mutual Prosperity Association of Kawaminami Industrial Company, Ltd., second, owning 8.6% and various Yasuda interests, third, owning a total of 7.9%. Long-term payables amounted to ¥143,262,000 as of 31 October 1945. The Nagasaki Branch of Yasuda Bank was the main creditor, having ¥123,375,000 or 8% of the long-term payables.
b. Investment: As of 31 October 1945, Kawaminami Industrial Company, Ltd. had investments totaling nearly ¥13,000,000, as follows:
Subsidiary Percentage of Control by Kawaminami Industrial Company, Ltd.
In Japan
Japan-Sea Dock Company, Ltd. 31.0
Kawaminami Construction Company, Ltd. 43.0
Kitagawa Iron Works, Ltd. 32.0
Nagasaki-ken Amalgamated Canned Fish Co. 12.0
(Some interlocking directorates exist between Kawaminami Industrial Company, Ltd., and the above named subsidiary companies.)
Outside Japan
Nampyo Coal Mine Company, Ltd. 32.0
c. Zaibatsu Affiliations: Although this Company is reportedly a family owned corporation, there is some reason to believe that, with the stoppage of shipbuilding, it easily could be made part of Yasuda Interests. As has been mentioned above, 86% of the bank loans are with Yasuda Bank, and 7.9% of its stock is owned by Yasuda affiliations. The President of the Nagasaki Branch of Yasuda Bank is one of the auditors of the Company.
d. Conclusions:
(1) Because of the geographical location of this Company, namely, at Nagasaki, it has engaged in cooperatives in an attempt to increase the benefits given its employees, such as food products and coal. It is reported that its interest in the canned fish company is to benefit company employees; it is assumed that some of the coal produced is sold or given to its employees. It is authoritatively reported that Kawaminami Industrial Company, Ltd., is the source of food for approximately 30,000 people, most of whom are employees and members of their families.
(2) The charter of the corporation is so written as to allow it to engage only in the operations of shipbuilding. It has, therefore, established independent corporations to build homes for its employees and construct buildings for its interest in Nagasaki-ken Amalgamated Canned Fish Company is because of charter limitation. Thus, if its charter were revised to allow for extended operations in the field of cooperatives for its employees, there would be only one (1) corporation.
(3) It is not considered desirable to have this Company nor its subsidiaries subject to proposed more stringent action, such as a purge of officers and directors; consequently, the attached Memorandum restricts their activities, requiring that they shall comply with the provisions of pertinent directives and make the same reports as required of companies on the Schedule of Restricted Concerns.
(4) This surveillance procedure is used to secure reports from these companies to determine whether further surveillance is necessary and so that SCAP's activities of investigating the structure of the Japanese industrial economy can be kept at the minimum consonant with the objectives of the Occupation.
3. The interests of USAFIK have been considered. This action does not affect the Korean area.
4. This is considered an administrative matter.
5. Concurrences: Industrial Division, ESS (Mr. G. T. Walker); Legal Division, ESS (Mr. H. T. Straitiff).
J. McI. H.