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International Notes

(13 November 1937)

From Socialist Appeal, Vol. I No. 14, 13 November 1937, p. 7.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Japanese Economy Crumbling Under War Strain

During the years of the last world crisis the weak sectors of Japanese economic structure were propped up through the advantages that Japan was able to gain in the world market in the cheapness of raw materials, outlets for its cheap exports and so on. Even at that period, however, the shaky financial position of Japan required a devaluation of the yen. The recent economic upswing and the general European rearmament competition which steeply forced up the prices of the basic raw materials have worked havoc with Japan.

The rise in prices on raw materials it must import has more than annulled the advantage of cheap labor. The cost of its rearmament program that has already-imposed a severe strain on the country’s resources has been more than doubled. For the past few years Japan’s export has barely covered two-thirds of the import. The costly Manchurian conquest, achieved with relative ease, has been followed by the far costlier campaign in North China. The price on rice, the basic foodstuff of the Japanese masses is the highest in a decade, and has been steadily rising. The peasantry long in an intolerable position is on the verge of despair because of the lack of goods and the steeply mounting prices. The budget calls for expenditures of 5% billion yens while the income is estimated at 1½ billion.

These ever-widening gaps and monstrous disproportions carry with them a threat of ruin for Japan. The foreign imperialist powers, whose interests are being encroached upon by the Japanese onslaught on China, are banking largely on economic difficulties to checkmate Japanese militarism. The European press, especially the British, is filled with speculations as to the possible effects of a lengthy Chinese resistance. The gravity of the situation is recognized and even openly discussed by Japanese newspapers as well.

The Manchester Guardian Weekly in its Oct. 22 issue carries a lengthy article on Japan, in which the main stress is laid precisely on this point. We cite a significant passage from it:

“Financial pages [of Japanese newspapers] contain serious discussions pointing out that the emergency appropriations up to December alone will be far more than the total cost of the Russo-Japanese War, even allowing for price changes, and that this is just a beginning. On the other hand no one is prepared to predict any collapse at present. There are rumors about restrictions on bank withdrawals, but nothing has been put into effect yet. Exchange control is becoming stricter and Japanese capital abroad is being mobilized. Domestic stocks have gone down rather heavily, and the Government is endeavoring to bolster up the market. Outside the munitions field businessmen are worried about the outlook, especially as regards raw materials.”

One of the conclusions that must be drawn from what has been said above is that Japanese militarism, faced with economic collapse, cannot withdraw now, but must plunge on with its plans of conquest, in the hope of thus averting an internal catastrophe.

The campaign against Russia is intensifying. Foreign correspondents report that large bodies of troops are being sent to Manchuria. Some even say that more soldiers are sent there than to Northern China, apparently in preparation for an onslaught on the Maritime Provinces. Says the Manchester Guardian: “The press is full everyday with reports of Russian activities in China, notably the dispatch of aeroplanes.”

Russian White Guards on the Class Nature of the Soviet Union

In its August 1937 issue Znamya Rossii, one of the most rabid counter-revolutionary periodicals published abroad, prints theses which attempt to draw the balance of the recent frame-up trials, the purge, and the ever-spreading campaign of terror.

Among other things, the theses state the following:

“Under the inescapable pressure of life itself, of the demands of foreign policy and the threat of war, the communist power was compelled to make numerous and important concessions, shifts, and retreats. All these changes, however, while providing some relief for the country, are inadequate; they are of a maneuvering and opportunist character, and incapable of reconciling the population with the power, and they do not alter the essence of the communist dictatorship.”

The conclusion drawn by the White Guards is that the foundations of the workers’ state have not been undermined sufficiently by Stalinism to enable the counter-revolution to hope for a peaceful triumph. An insurrection, at least a “palace revolution”, is required, in their opinion.

* * *

Orlov, head of the Soviet navy, has been “replaced.” Ivanov, the commander of the warship Marat, who was sent to the coronation of George VI, is among the “missing”.

* * *

Dubnov, one of the few remaining old-timers, has been removed from his post as Commissar of Education, and is now no doubt in jail.

* * *

Mugdussi, head of the Armenian G.P.U., who a short time ago was decorated by Yezhov himself with the highest honor, the Order of Lenin,, for his “zeal in prosecuting the enemies of the people’”, has himself been arrested as a “counter-revolutionist”.

Last updated: 31 July 2015