SCAPIN-1690: AMENDMENTS TO REGULATIONS AFFECTING RESTRICTED CONCERNS
GENERAL HEADQUARTERS
SUPREME COMMANDER FOR THE ALLIED POWERS
APO 500
20 May 1947
AG095
(20 May 47)
ESS/AC
(SCAPIN-1690)
| MEMORANDUM FOR | IMPERIAL JAPANESE GOVERNMENT. |
|---|---|
| THROUGH | Central Liaison Office, Tokyo. |
| Subject | Amendments to Regulations Affecting Restricted Concerns. |
1: Reference are the following memoranda for the Imperial Japanese Government from General Headquarters, Supreme Commander for the Allied Powers:
a. AG 004 (8 Dec 45) ESS/AC, (SCAPIN-403), dated 8 December 1945, subject: Establishment of a Schedule of Restricted Concerns.
b. AG 300.8 (8 Dec 45) ESS/AC, (SCAPIN-408), dated 8 December 1945, subject: Regulations Affecting Restricted Concerns.
2. Memorandum for the Imperial Japanese Government from General Headquarters, Supreme Commander for the Allied Powers, AG 248 (24 May 46) ESS/AC, (SCAPIN-981), dated 24 May 1946, subject: Payment of Salaries to Executive Officers of Restricted Concerns is rescinded.
3. Paragraph 2 of reference memorandum 1b, above, is rescinded and the following substituted therefor.
“2. The Imperial Japanese Government will take immediate action to assure that each concern listed on the Schedule of Restricted Concerns established by reference memorandum 1a, above, will comply with the following directions:
a. Accurate double entry records of accounts will be maintained, accounting for all income and expenditures supported by vouchers, invoices, sales receipts, bank statements, inventory schedules and other business documents necessary to substantiate the authenticity of all book entries.
b. None of the following acts will be performed without the prior approval of General Headquarters, Supreme Commander for the Allied Powers:
(1) Merger, consolidation, dissolution or reduction in capital.
(2) Transfer or lease, in whole or in part, of the business; giving a mandate to manage such business or for sharing with another person the entire profits or losses in relation to the business or entering into any similar contract.
(3) Entrance into a new field of activity unrelated to the present business.
(4) Issuance of new stocks or debentures or calling, unpaid capital
(5) Payment of any remuneration, including bonus and retirement allowances to executive officers other than periodical salary payments approved at a general or special meeting of shareholders and provided the proposed payments shall be mentioned in the notice of such meeting. No increase of salary shall be granted to any individuals coming under the provisions of Imperial Ordinance No. 1 of 1947 until such executive officer shall have been granted a certificate of clearance by the Imperial Japanese Government.
(6) Donations to executive officers or to other persons.
(7) Payment or declaration of dividends except out of earned income and not in excess of five (5) percent of paid up capital per annum. Proposed dividend declaration or payment, in any case, shall be reported to the Supreme Commander for the Allied Powers.
(8) Loans to executive officers or, except in the case of financial institutions, to other persons.
(9) Borrow or expend funds for any purpose except normal operating expenses.
(10) Acquire by purchase or lease additional capital equipment.
(11) Sell, transfer, lease or otherwise dispose of capital assets iucluding lands, buildings, major items of equipment and securities.
c. The Imperial Japanese Government will on Monday of each week submit to Antitrust and Cartels Division, Economic and Scientific Section, General Headquarters, Supreme Commander for the Allied Powers, a list of all applications received the previous week in conformity with paragraph 2b, above, listing date of receipt, name of applicant and subject of the application.”
FOR THE SUPREME COMMANDER:
R. M. LEVY,
Colonel, AGD,
Adjutant General.
MEMO FOR RECORD: (SCAPIN - 1690)
16 May 1947
1. References are the following SCAP Memoranda to the Imperial Japanese Government:
a. AG 004 (8 Dec 45) ESS/AC, (SCAPIN-403), subject: "Establishment of a Schedule of Restricted Concerns."
b. AG 300.8 (8 Dec 45) ESS/AC, (SCAPIN-408), subject: "Regulations Affecting Restricted Concerns."
c. AG 248 (24 May 46) ESS/AC, (SCAPIN-981), subject: "Payment of Salaries to Executive Officers of Restricted Concerns."
2. Reference 1a, above, established a Schedule of Restricted Concerns which now consists of approximately 1,000 companies. Reference 1b, above, limits the activities of these Restricted Concerns and requires that they submit applications for permission to perform such acts as borrowing money, disposing of assets, paying dividends and issuing stock. Reference 1c, above, fixes the maximum salary which may be paid to officers of such concerns without the approval of SCAP.
3. In view of the fact that reference memorandum 1b, above, is the basis for Imperial Ordinance No. 657 (an act entitled "Restrictions for Dissolution of Companies'''), it is deemed inadvisable to rescind the entire memorandum. Since it is necessary to make a change in this memorandum regarding payment of salaries and to add a requirement by the Imperial Japanese Government, both of which are discussed below, paragraph 2 of the memorandum is rescinded and paragraph 2, quoted in directive, substituted therefor.
4. As stated above, the changes are as follows:
a. Under paragraph 2i of reference memorandum 1b, above, as amended by reference memorandum 1c, above, Restricted Concerns are required to make application to SCAP for proposed salary payments in excess of those paid in June 1945, plus fifty (50) percent of any bonus paid out of profits for the last term ending in or immediately preceding June 1945, divided by the number of months of such term, provided the total does not exceed ¥3, 000 per month. This has resulted in the Antitrust and Cartels Division, ESS, which is charged with acting on these applications, receiving a great number of applications for salary payments in excess of those authorized by memorandum referred to above. In order to eliminate this, paragraph 2i of this memorandum has been modified to allow periodic salary payments, excluding bonus and retirement allowances, to be determined by a general or special stockholders meeting. The shares of most of the Restricted Concerns are held by the Holding Company Liquidation Commission so there will be control over salary payments under this modification. Furthermore, the modifications do not allow the salaries of individuals coming under the purge to be increased. Therefore, paragraph 2 of memorandum reference paragraph 1b, above, and memorandum reference paragraph 1c, above, are rescinded.
b. In many cases Restricted Concerns submit applications to the Imperial Japanese Government and a long period of time elapses before they reach SCAP. In order to determine the date applications are submitted by Restricted Concerns to the Imperial Japanese Government, the Imperial Japanese Government will be required to submit on Monday of each week a list of all applications received the previous week. This will keep the Imperial Japanese Government from holding applications for reasons not known to SCAP.
5. There are certain other regulations affecting Restricted Concerns which result in effect and are not changed by this memorandum. For instance, there is regulation prohibiting dissolution or liquidation of major financial or industrial enterprises. There is also a memorandum prohibiting sale of securities in or by certain Restricted Concerns and one prohibiting changes of names of such concerns without prior SCAP approval.
6. This is an administrative matter, and no surveillance by the Eighth Army is required.
7. The interests of USAFIK are not concerned.
8. The revised regulations have been approved by the Economic Policy Board, ESS, as being conductive to increasing productivity and rehabilitation work of the Restricted Concerns without notifying necessary SCAP surveillance over them.
9. Concurrences: ESS/LE (Mr. E. J. Carrington)
ESS/PC&R (Lt. Col. C. L. Waldron for Mr. W. S. Egekvist)
ESS/lN (Mr. G. T. Walker)
ESS/TD (Mr. H. S. Tate)
ESS/FI (Mr. L. W. LaCount)
E. C. W.
