MEMO FOR RECORD: (SCAPIN - 995)
WFM/JMcIH/JCH/gg
25 May 1946
1. a. On 6 November 1945, SCAP Memorandum AG 004 (6 Nov 45) ESS/ADM (SCAPIN-244), subject: "Dissolution of Holding Companies," prohibited the sale, gift, assignment or transfer of any movable or immovable property, including securities and other evidences of ownership, indebtedness or control by members of the "Big Four" Zaibatsu families (Mitsui, Iwasaki, Yasuda and Sumitomo) or by any person acting in their behalf. This action was necessary to prevent these financially influential families from investing in new pursuits that ultimately would materialize in in new monopolistic combines.
b. On 8 December 1945, SCAP Memorandum AG 004 (8 Dec 45) ESS/AC (SCAPIN-403), subject: ''Establishment of a Schedule of Restricted Concerns," established a Schedule of Restricted Concerns; SCAP Memorandum AG 300.8 (8 Dec 45) ESS/AC (SCAPIN-408), subject: "Regulations Affecting Restricted Concerns," restricted the activities of Restricted Concerns to those incidental to the normal course of business.
c. At present, the business activities of certain families who control the stock of Restricted Concerns are not covered by either SCAP Memoranda (SCAPIN-244) or (SCAPIN-408) referred to above. The former Memorandum covers only the "Big Four" families; the latter Memo restricted the business activities of Restricted Concerns, but not the controlling families thereof. Hence, the business activities of the following named controlling families are presently uncontrolled:
Restricted Concerns Controlling Families
Asano Honsha Asano
Fuji Industrial Co., Ltd. Nakajima
Furukawa Mining Co., Ltd. Furukawa
Kawasaki Heavy Industry Kawasaki
Matsushita Electric Industry Co., Ltd. Matsushita
Nissan and Co. Aikawa
Nomura and Co. Nomura
Okura Mining Company, Ltd. Okura
Riken Industry Co., Ltd. Okochi
Shibusawa Dozoku and Co. Shibusawa
2. a. It has come to the attention of SCAP (reference, Inclosure 1, hereto) that various members of the above listed controlling families are financing new enterprises and, hence, expanding the web of monopoly in Japan. Inclosure 2, hereto, shows the total securities owned by the above listed families, and by each member thereof. These securities include those in non-restricted concerns, as well as in Restricted Concerns. The securities in non-restricted concerns and Government bonds, as well as large personal bank deposits, can at present be used to engage in new enterprises, an example of which is an informal application by a theater owner to remodel a moving picture theater, the funds in the amount of ¥8,648,688 to be furnished by Baron Kishichiro Okura, former Chairman of the Board of Okura and Company. Unless a program restricting the use of the personal assets of the controlling Zaibatsu families is effectuated, the program of dissolving the Zaibatsu will be largely nullified. Accordingly, the Imperial Japanese Government is being directed to take immediate steps to prohibit the sale, gift, assignment or transfer of any movable or immovable property, including securities and other evidences of ownership, indebtedness or control by the families named in paragraph 1c, above, or by any person acting in their behalf.
b. The Imperial Japanese Government is, however, permitted to authorize such living expense as are just and reasonable for the families affected by the attached Memorandum. No amounts are to be authorized which cannot be attributed directly to living expenses or taxes.
3. The interests of USAFIK have been considered. This action does not affect the Korean area.
4. This is considered an administrative matter.
5. Concurrences: Legal Division, ESS (Lt. Col. E. R. Minnich)
Finance Division, ESS (Lt. Col. D. L. Jennings)
J. McI. H.
2 Incls:
1. Newspaper article captioned, "Zaibatsu Backing New Movie Houses," 1 May 46.
2. List of Securities held by Certain Controlling Families of Restricted and Non-Restricted Concerns.