Pubdate: Thu, 30 Aug 2007
Source: Japan Times (Japan)
Copyright: 2007 The Japan Times
Contact:  http://www.japantimes.co.jp/
Details: http://www.mapinc.org/media/755
Author: Reiji Yoshida

NARCOTICS TRADE BOOSTED ARMY SCRIP

Japan used the opium trade of Shanghai's major dealer to prop up the 
value of its military currency in occupied China during the war, 
according to a leading expert on China's wartime economy, citing a 
former secret document.

The latest finding in the document on the Japanese-run opium firm 
Hung Chi Shan Tang, now kept in the National Diet Library, reveals 
Japan used opium to gain economic hegemony over Chiang Kai-shek's 
yuan-based legal tender in the 1940s, using it to bolster the 
military "gunpyo" scrip, said Hideo Kobayashi, a professor at Waseda 
University in Tokyo.

"It has been said that opium may have been used to support the value 
of (Japan's) military currency, but this is the first glimpse at how 
the system worked and the exact amount (of opium involved)," said 
Kobayashi, author of a number of books on the war Japan waged and the 
economy of occupied China.

Japanese forces issued gunpyo to procure materials in China, using 
the scrip to subvert Chiang's legal tender.

In the document, Hajime Satomi, president of Hung Chi Shan Tang, said 
his firm in 1941 started quoting opium prices in yen terms using 
gunpyo, instead of legal tender.

"This means that to buy opium, (locals) would need to buy gunpyo 
first by selling their legal tender," Kobayashi said. "This would 
push up the value of gunpyo."

He also said Tokyo was engaged directly in the currency operation 
involving opium.

A passage regarding a financial settlement for "Mongolian opium" that 
appears on Page 11 of the 21-page document reads: "The impact on 
gunpyo operations is so huge that the gunpyo vs. legal tender 
operations have been all entrusted to the China Affairs Board and the 
Zaimukan of the Finance Ministry."

The China Affairs Board was the wartime ministry on China affairs. 
Zaimukan was a senior Finance Ministry position.

The document shows the amount of opium exchanged for gunpyo was 
valued at "nearly Y100 million" in 1942.

"This is a tremendous amount. Opium would make a perfect weapon 
(against legal tender) because its sales were huge," Kobayashi said.

To back up the gunpyo value, Japan shipped various goods to China, 
ranging from cotton to sugar to industrial chemicals, which were made 
available to locals in exchange for the military scrip at 
distribution stations in occupied areas.

Official records showed the value goods Japan prepared to support the 
military note stood at Y200 million in 1942. Opium, despite its huge 
value shown in the internal document, is not shown in any other 
records, Kobayashi said, adding, "Opium was too dirty and it has been 
kept secret until now."
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