SCAPIN-1374: LIMITATION OF ACTIVITIES OF AND REQUIRING OF REPORTS FROM JAPAN PRECISION INDUSTRY COMPANY, LTD., (NIPPON SEIKO K.K.)
GENERAL HEADQUARTERS
SUPREME COMMANDER FOR THE ALLIED POWERS
APO 500
2 December 1946
AG 095
(2 Dec 46)
ESS/AC
(SCAPIN-1374)
| MEMORANDUM FOR | IMPERIAL JAPANESE GOVERNMENT. |
|---|---|
| THROUGH | Central Liaison Office, Tokyo. |
| Subject | Limitation of Activities of and Requiring of Reports from Japan Precision Industry Company, Ltd, (Nippon Seiko K. K.) |
1. References are the following Memoranda for the Imperial Japanese Government from General Headquarters, Supreme Commander for the Allied Powers:
a. File AG 319.1 (25 Oct 45) ESS/IE (SCAPIN 177), dated 25 October 1945 subject: Reports to be Made by Certain Business Firms.”
b. File AG 004 (31 Oct 45) ESS (SCAPIN 215), dated 31 Obtober 1945, subject: Sale or Transfer of Securities of Certain Business Firms.
c. File AG 004 (8 Dec 45) ESS/AC (SCAPIN 403), dated 8 December 1945, subject: Establishment of a Schedule of Restricted Concerns.
d. File AG 300.8 (8 Dec 45) ESS/AC (SCAPIN 408), dated 8 December 1945, subject: Regulations Affecting Restricted Concerns.
e. File AG 123 (15 Jan 46) ESS/FI (SCAPIN 599), dated 15 January 1946, subject: Restriction on Dividend Payments.
f. File AG 319.1 (19 Jan 46) ESS/AC (SCAPIN 625), dated 19 January 1946, subject: Reports to be Made by Certain Business Firms.
g. File AG 248 (24 May 46) ESS/AC (SCAPIN 981), dated 24 May 1946, subject: Payment of Salaries to Executive Officers of Restricted Concerns.
h. File AG 004 (4 Jul 46) ESS/AC (SCAPIN 1053), dated 4 July 1946, subject: Changes in Names of Restricted Concerns.
i. File AG 004 (28 Sep 46) ESS/AC, (SCAPIN 1238), dated 28 September 1946, subject: Supplementary Regulations Affecting Restricted Concerns.
j. File AG 004.05 (4 Oct 46) ESS/AC (SCAPIN 1250), dated 4 October 1946, subject: Amendments to Memoranda Affecting Restricted Concerns.
2. The Imperial Japanese Government will take immediate action to assure that Japan Precision Industry Company, Ltd, complies with the provisions of and makes reports required by reference Memoranda listed in paragraph 1, above.
3. No requirement of this Memorandum shall be construed as placing Japan Precision Indutry Company, Ltd, on the Schedule of Restricted Concerns referred to in paragraph 1c, above.
FOR THE SUPREME COMMANDER:
JOHN B. COOLEY,
Colonel, AGD,
Adjutant General.
MEMO for RECORD: (SCAPIN - 1374)
WFM/VHK/PWB/gg
26 November 1946
1. Pursuant to the policy set forth in Joint Chiefs of Staff 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 Precision Industry Company, Ltd., disclosed the following:
a. The Japan Precision Industry Company, Ltd., was incorporated in 1916 with an authorized capital of ¥350,000 for the purpose of manufacturing precision ball and roller bearings. In 1919 its authorized capital was increased to ¥700,000 and again in 1934 it was increased to ¥1,500,000; however, it experienced its greatest expansion during the war years (1937 to 1945) during which time its authorized capital was increased to ¥70,000,000, of which amount ¥55,000,000 was fully paid. During this same period of time production increased from ¥5,802,000 in 1937 to ¥77,264,000 in 1944, the peak production year. At the close of the war Japan Precision Industry Company Ltd., was operating seven (7) Pants, employing 7,646 people, utilizing 3,210 machines, with a production capacity of 10,629,840 units per year, which made it the second largest faring producer in Japan.
b. The Yasuda interests hold approximately fourteen (14) percent of the outstanding shares of this Company and occupy the majority of directorate positions. Further, the Japan Precision Industry Company, Ltd., is indebted to the Yasuda Bank, Ltd., for approximately ¥60,000,000. in short term loans. Thus, it can be clearly stated that Yasuda interests dominate and control this Company.
c. Washington directive pertaining to the interim reparations program directed the removal of all ball and roller bearing capacity in excess of 32.5 million yen per year, based on 1943-44 prices. This resulted in selecting approximately ninety (90) percent of the industry for reparations. Accordingly, selection was made leaving two (2) plants of the Japan Precision Industry Company, Ltd., with a balanced production capacity, in quantity and types of bearings, to meet the minimum economic requirements of Japan. Although such selection will result in the creation of a monopoly in the bearing industry, it is considered desirable for the following reasons:
(1) Size and production of other concerns would have necessitated scaling down of facilities of the entire industry, which has two disadvantages:
(a) Leaves a greater war potential.
(b) Does not leave complete integrated plants for reparations.
(2) A reduction of ninety (90) percent in the bearing industry would have resulted in virtual monopoly regardless of the selection made.
(3) Greater control can be exercised over a strategic industry.
(4) By placing the Japan Precision Industry Company, Ltd., under the surveillance of SCAP, financial as well as industrial reorganization can be achieved, thus somewhat reducing the evils of monopoly.
d. For the reasons set forth above, the Japan Precision Industry Company, Ltd., is hereby placed under the surveillance of SCAP.
3. This is an administrative matter and no surveillance by the Eighth Army is required.
4. The interests of USAFIK are not concerned.
5. Concurrences: ESS/IN (Mr. C. D. Ross); ESS/LE (Major E.R. Minnich).
V. H. K. 2 2439
