MEMO FOR RECORD: (SCAPIN - 1363)
WFM/VHK/RMG/gg
15 November 1946
1. a. Since 6 November 1945, the four main Zaibatsu Families (Mitsui, Iwasaki, Yasuda and Sumitomo) have been prohibited from selling, assigning, transferring or otherwise disposing of their properties, including securities and evidences of indebtedness, ownership and control. Allowance of reasonable amounts for living expenses has been subject to prior authorization and supervision of the Imperial Japanese Government: SCAF Memorandum AG 004 (6 Nov 45) EAA/ADM, (SCAPIN-224), subject: Dissolution of Holding Companies.
b. Since 3 June 1946, the following additional families have likewise been prohibited from dealing with or in any manner disposing of their properties, and their living expenses have similarly been subject to prior authorization and control of the Imperial Japanese Government: SC Memorandum AG 091. 4 (3 June 46) ESS/AC, (SCAPIN-995), subject: Reports to be Made by Certain Families:
Aikawa Nakajima
Asano Nomura
Furukawa Okochi
Kawasaki Okura
Matsushita Shibusawa
c. On 19 January 1946, reports containing comprehensive information had been called for from the main four Zaibatsu Families as well as ten additional Families, including virtually all of those subsequently covered by SCAP Memorandum AG 091.4 (3 June 46) ESS/AC, (SCAPIN-995), subject: Reports to be Made by Certain Families.
d. It is now proposed to liquidate the wealth of these Zaibatsu Families by converting their assets into non-negotiable government bonds.
2. a. On 8, 16 and 20 October 1946 the four major Zaibatsu holding companies (Mitsui, Mitsubishi, Yasuda and Sumitomo) and Fuji Industrial Company, Ltd., surrendered to the Holding Company Liquidation Commission all of the securities aggregating over ¥2,500,000,000 held by them in subsidiary, affiliate and other companies. In the course of time their assets will also be turned over to the 'Commission. The turning over of the family property and assets to the Liquidation Commission at this time represents the next necessary step in the over-all program to dissolve monopolistic Japanese combines, liquidate Zaibatsu assets through which they maintain their control over the economy, and redistribute the various properties and securities in a fair and equitable manner, including reasonable compensation therefor in the form of ten-year non-negotiable bonds of the Imperial Japanese Government. In furtherance of this policy, the proposed directive authorizes the Imperial Japanese Government to initiate appropriate action to take over the properties, of whatever nature, of the leading Zaibatsu families and others whose assets have been restricted and bared from transfer or disposition, and whose living expenses have been specifically regulated. This action is in accordance with the principles of the basic Joint Chiefs of Staff directive 1380/15 and the proposed United States policy recently announced by SWNCO. By this means the influence of Zaibatsu Families and family members will be further eliminated from the Japanese economy, and the freezing of their wealth will prevent any attempt to regain the possession that they once achieved through the investment of their wealth. Insofar as the administration of their living expenses is concerned, the HCLC is empowered to take over the work now being performed by the Ministry of Finance. The Liquidation Commission is expressly authorized to exercise such jurisdiction over the property of the following designated families and their members:
Aikawa Nakajima
Asano Nomura
Furukawa Okura
Iwasaki Sumitomo
Mitsui Yasuda
d. Those families which have heretofore been barred from transferring or in any manner disposing of their properties or assets, and whose living expenses have been supervised pursuant to SCAP Memorandum AG 091.4 (3 June 46) ESS/AC, (SCAPIN-995), subject: Reports to be Made by Certain Families, that do not appear in the list of designated families set out in subparagraph 2a, will continue to be subject to the supervision and control of the Ministry of Finance, Imperial Japanese Government. These families (which include the Okochi, Kawasaki, Matsushita and Shibusawa Families) have not been included in the proposed directive because their present financial position is so relatively insignificant that no useful purpose would be accomplished by liquidating their assets. However, if at any time their financial position becomes more significant they will be placed under the jurisdiction of the Liquidation Commission along with any other families which are determined to be undesirable elements in the Japanese economy. Investigations of certain families are now proceeding within this Section and appropriate action will be taken with respect to their properties and assets as the facts are developed in each case.
3. Representatives of the Imperial Japanese Government have informed this Section that the action required cannot be accomplished by informal or oral instructions and that the issuance of a directive will be necessary. A time limit has been placed in the directive in order to insure prompt action prior to and shortly after the time when the Diet convenes. It is not considered expedient to attempt to submit such legislation as is contemplated to the Diet for full debate.
4. This is an administrative matter and no surveillance by the Eighth Army is required.
5. The interests of USAFIK are not concerned.
6. Concurrences: Govt. Section, General Whitney
V. H. K.