MEMO FOR RECORD: (SCAPIN - 1043)
WFM/JMcIH/HGH/gg
20 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 Japan Rolling-stock Manufacturing Company, Ltd., (Nippon Sharyo Seizo K. K.) has disclosed the following:
a. Monopolistic Control: The Japan Rolling-stock Manufacturing Company, Ltd., while not a holding company, is the largest single producer of freight cars, passenger and electric cars, and one of the leading producers of steam locomotives. Using the potential production of various rolling-stock companies for the year 1944 as a base, this Company produced 20% of the steam locomotives, 29.5% of the passenger and electric cars and 30.6% of the freight cars. The nearest competitor produced only 13.9% of the passenger and electric cars and only 15.9% of the freight cars.
b. Financial Control: Securities in the amount of ¥119,933.05 are shown on the balance sheet as of 30 November 1945. The largest single item of this amount represents 2,200 shares (value ¥110,000) of Japan Lumber Company, Ltd., a control association. A SCAP Memorandum is in process which will dissolve the latter company. The authorized and paid-up capital amounts to ¥20,000,000. The six (6) largest stockholders and the percentages owned by each are as follows:
Stockholders Percentage of Stock Owned
Mr. Haruichi Amano 15.3
Wartime Finance Bank 4.5
Japan Life-Insurance Company 4.1
Mr. Kozo Goto 3.5
Tokai Bank 3.5
Meiji Life Insurance Company 2.6
There is no apparent control by the Zaibatsu or other large combines.
c. Conclusions:
(1) Because the rolling-stock industry is presently overexpanded, it is deemed advisable to maintain some control over this company, because of its potentially monopolistic position within the industry. It might be possible to separate the Nagoya and Tokyo plants, because they are reportedly independent except for administrative purposes. The production of the plants is as follows:
Steam Locomotives Passenger and Electric Cars Freight Cars
Nagoya Plant 168 400 3,000
Tokyo Plant 240 2,200
(2) It is not considered desirable at this time to have Japan Rolling-stock Manufacturing Company, Ltd., subject to proposed more stringent action, such as a purge of officers and directors; consequently, the attached-Memorandum restricts its activities and requires that it shall comply with the provisions of pertinent directives and make the same reports as required of companies on the Schedule of Restricted Concerns.
(3) This surveillance procedure is used to secure reports from these companies to determine if 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: Legal Division, ESS (Lt. Col. E. R. Minnich);
Industrial Division, ESS (Mr. C. T. Walker)
J. McI. H.