SCAPIN-1355: PERMITS FOR CONVERSION AND RECONVERSION OF INDUSTRIAL PLANTS
GENERAL HEADQUARTERS
SUPREME COMMANDER FOR THE ALLIED POWERS
APO 500
22 November 1946
AG 004
(22 Nov 46)
ESS/IN
(SCAPIN-1355)
| MEMORANDUM FOR | IMPERIAL JAPANESE GOVERNMENT. |
|---|---|
| THROUGH | Central Liaison Office, Tokyo. |
| Subject | Permits for Conversion and Reconversion of Industrial Plants. |
1. References are the following memoranda for the Imperial Japanese Government from General Headquarters, Supreme Commander for the Allied Powers:
a. Directive No. 3, (SCAPIN 47), dated 22 September 1945.
b. File AG 004 (28 Oct 45) ESS/IN, (SCAPIN 201), dated 28 October 1945, subject: Reconversion of War Production Plants to Peacetime Production.
c. File AG 300.5 (24 Nov 45) ESS/IN, (SCAPIN 339), dated 24 November 1945, subject: Clarification of Directive No. 3 as regards Conversion.
d. File AG 004 (8 Dec. 45) ESS/IN, (SCAPIN 402), dated 8 December 1945, subject: Applications for Reconversion of Industrial Plants.
e. File AG 004 (20 Jan 46) ESS/GD, (SCAPIN 629) dated 20 January 1946, subject: Custody, Control and Protective Maintenance of Japanese Aircraft Plants, Arsenals and Laboratories, and any revisions thereof.
f. File AG 387.6 (13 Aug 46) ESS/IN, (SCAPIN 1129), dated 13 August 1946, subject: Reparations Selections within the Soda Ash and Caustic Soda Industries.
g. File AG 287.6 (13 Aug 46) ESS/IN, (SCAPIN 1130), dated 13 August 1946, subject: Reparations Selections within the Iron and Steel Industries.
h. File AG 387.6 (13 Aug 46) ESS/IN, (SCAPIN 1131), dated 13 August 1946, subject: Reparations Selections of Steam-Electric Power Generating Plants.
i. File AG 387.6 (13 Aug 46) ESS/IN, (SCAPIN 1132) dated 13 August 1946, subject: Reparations Selections within the Sulphuric Acid Industry.
j. File AG 387.6 (13 Aug 46) ESS/IN, (SCAPIN 1133), dated 13 August 1946, subject: Reparations Selections within the Machine Tool Industry.
k. File AG 387.6 (13 Aug 46) ESS/IN, (SCAPIN 1134), dated 13 August 1946, subject: Reparations Selections within Privately Owned Munitions Plants.
l. File AG 387.6 (13 Aug 46) ESS/IN, (SCAPIN 1135), dated 13 August 1946, subject: Reparations Selections within the Shipbuilding Industry.
m File AG 387.6 (13 Aug 46) ESS/IN, (SCAPIN 1136), dated 13 August 1946, subject: Reparations Selections within the Precision Bearing Industry.
n. File AG 464.6 (17 May 46) ESS/IN, (SCAPIN 962), dated 17 May 1946, subject: Production, Distribution and Use of Fertilizers.
2. Reference 1a above is hereby amended by deleting therefrom paragraph numbered 3b.
3. References 1b, 1c and 1d are hereby rescinded.
4. Except as herein otherwise provided permits from the Supreme Commander for the Allied Powers to convert or reconvert industrial plants will be required hereafter only for plants specifically designated for reparations, and for such other, concerns and industries as the Supreme Commander for the Allied Powers may direct.
5. Applicatiors for permits to convert or reconvert plans designated for reparations will be submitted by the Imperial Japanese Government to General Headquaters, Supreme Commander for the Allied Powers. the Imperial Japanese Government will be responsible for rejecting applications received by it which:
a. Utilize productive facilities for which alternate facilities not subject to reparations are available for use or can be developed within a reasonable period of time; or,
b. Are for production on Japanese demands not deemed essential to the Japanese economy. Application for use of reparations facilities for production on Allied Forces demands will be screened for the first criterion only.
6. Applications for permits submitted by the Imperial Japanese Government to General Headquarters, Supreme Commander for the Allied Powers, will be approved only when they show adequately:
a. The nature of the proposed conversion or reconversion.
b. The extent of any proposed changes in physical facilities.
c. That other facilities adequate for such production or equally as adaptable are not available for use.
d. That the product to be produced is essential to the needs of the Japanese economy or of the occupation forces.
e. The length of time for which utilization of the facility is requested.
f. That provisions are being made to replace the production, if necessary, when the given facility is closed for reparations removal.
7. A conversion or reconversion permit authorizes a given plant to change the end products manufactured. The distinction between conversion and reconversion rests upon the nature of the desired change. Conversion applies generally to those cases where the desired end products have not previously been manufactured. Reconversion applies generally to cases where the desired end products have been previously manufactured in the subject plant.
8. Conversion and reconversion permits heretofore issued to reparations plants by proper authority will continue in effect and new applications need not be submitted. Continued operations pursuant to any such permit will be governed by the provisions of the applicable custody memorandum, reference paragraph 1 above.
9. Special controls for fertilizer plants, insofar as production of fertilizer is concerned, will be in accordance with the provisions of reference 1n, above, regardless of whether such plants are also designated for reparations. Productive facilities of fertilizer plants not used for the production of fertilizer will be dealt with in accordance with the provisions of paragraph 4 above.
10. This memorandum will not be construed as amending previous memoranda, and/or instructions issued pursuant thereto or delegations of authority prescribed thereunder, with respect to plants designated for reparations for matters regarding custody and control other than procedures for conversion and reconversion applications.
FOR THE SUPREME COMMANDER:
JOHN B. COOLEY,
Colonel, AGD,
Adjutant General.
MEMO FOR RECORD: (SCAPIN - 1355)
14 November 1946
1. This directive refers to all pertinent memoranda and amends Directive #3, Office of the Supreme Commander, SCAPIN 47, dated 22 September 1945 by deleting par 3b and substituting a revised procedure for applying for reconversion permits for plants designated for reparations only. Par 3b required ''where conversion is considered necessary of plants heretofore engaged in the production of items prohibited by par 4 (war-time production) to the production of essential consumers commodities, you will submit individual application for such conversion of each plant concerned.' This provision was an emergency measure to clarify industrial conversion procedures and to prevent the haphazard reconversion of industries having war potential or which would be designated for reparations.
2. The processing of conversion permits was delegated to the 8th U. S. Army by SCAPIN 402 (see ref. Id) 8 December 1945 subject, "Application for Reconversion of Industrial Plants." This memorandum is deleted in this directive for it no longer will pertain to the question of processing permits.
3. Par 3a of Directive #3 also directed the maximum production of all essential consumers commodities. The purpose of this directive is to expedite the production of such necessary commodities by lifting military controls. By allowing conversion and production without permits much valuable time of both the industrialists and the Occupation Forces can be saved. Many times such permits have taken months to prepare at much cost, and the processing has been a long procedure, sometimes taking many months.
4. Military surveillance of all individual plants in Japan, other than reparations plants, is no longer necessary and the objectives of the occupation can be more effectively obtained on the national level by requiring the approval of national production plans as instituted by the Economic Stabilization Board. The Imperial Japanese Government has the function of planning the civilian economy of Japan and all measures to expedite the preservation of all property and records of any companies which contributed to the Japanese war effort, remains in effect to protect and maintain those plants which may be subsequently designated for reparations under either the interim or final reparations programs.
5. The fertilizer industry remains under close SCAP control and this directive does not change existing instruction.
6. To prevent confusion between conversion and reconversion the terms are defined.
7. The object of retaining the provision for applying for conversion and reconversion permits for reparations plants is to prevent any attempt of the manufacturers or the local or national governments to give undue importance to these plants by permitting them to manufacture commodities necessary to the minimum Japanese economy when facilities for their production are available elsewhere in Japan. The present objective is to minimize the importance of the plants designated for reparations in the economic life of Japan.
8. Anti-trust and Cartels Division required no conversion or reconversion permits to effectively carry out their program of control and dissolution of the restricted companies (Zaibatsu), as sufficient control can be exercised through the control of funds and securities of such companies.
9. The interests of Korea are not involved in this question. Concurrences:
Ind/Repr NJM
Ind/RM HBO
Ind/Mfg SC
AC RMC
Legal ERM
T/D SW
S. C.
