SCAPIN-117: FINANCE MINISTRY REQUEST TO RELAX SALARY CONTROLS

GENERAL HEADQUARTERS
SUPREME COMMANDER FOR THE ALLIED POWERS


10 October 1945

AG 240 (10 Oct 45) ESS
(SCAPIN-117)

MEMORANDUM FOR

IMPERIAL JAPANESE GOVERNMENT.

THROUGH

Central Liaison Office, Tokyo.

SUBJECT

Finance Ministry Request to Relax Salary Controls.

1. This communication is in reply to a letter from the Finance Ministry, dated 6 October 1945, requesting authorization to exempt certain companies from salary control regulations under “The Company Intendance Control Decree”.
2. Reference is made to paragraph 2 (a) of Directive No. 3 to the Imperial Japanese Government. The request referred to in paragraph 1 above is not favorably considered for the following reasons:
a. Relaxation of controls would stimulate inflationary trends and would permit uncontrolled distribution of any accumulated dividends or profits.
b. Requirement for compliance by certain companies and not others appears to be inequitable.

FOR THE SUPREME COMMANDER:

H.W.ALLEN
Colonel, A.G.D.,
Asst Adjutant General

DISTRIBUTION:
CG 6th Army (3)
CG 8th Army (3)
AG (5)
ESS (15)

MEMO FOR RECORD : (SCAPIN -117)
10 October 1945
1. Attached memorandum for the Imperial Japanese Government is in reply to attached letter from Finance Ministry dated 6 Oct 45 which was delivered by hand. This letter proposes the relaxation of salary control regulations in the case of reliable companies while requiring strict compliance of others.
2. Mr. Ihara, Finance Ministry, explained that approximately 12,000 companies were currently covered by the salary control decree and that about 6,000 were classed as reliable.
3. Proposal was not considered favorably for the following reasons:
a. Relaxation of controls would stimulate inflationary trends and would permit uncontrolled distribution of any accumulated dividends or profits.
b. Requirement for compliance by certain companies and not others appears to be inequitable.
4. Concurrence has been obtained from Finance Division and Price Control Division of Economic and Scientific Section.
W. K.