Power in Japan

As they did with baseball, the Japanese caught on to the tricks of the electric power & light business quickly indeed. From a small creaking generator installed by Tokyo Electric Light Co. in 1887, the industry has pushed forward until only Germany and the U. S. rank ahead of Japan in power production. No major country but Japan can boast that its largest capital investment is in power plants, transmission lines, substations. The Japanese took to the game so wholeheartedly that today their system is actually overbuilt; generating stations with a capacity of some 300,000 k. w. lie idle. Burdened, too. with severe competition among the leading power companies and the strain of paying interest on foreign loans in depreciated yen, the industry has fallen upon evil days. Profits of 10% or 12% have shrunk to 4% or 5%, dividends have been pared or omitted entirely. Last week Baron Seinosuke Goh, head of Tokyo Electric, declared that the sole hope of Japan's power & light industry was a merger of all the leading units.

Baron Goh's Tokyo Electric is not only the biggest concern in the field but also the biggest corporation in Japan. The great banking house of Mitsui has tremendous holdings in it. Serving the rich industrial area around Tokyo and Yokohama, it produces nearly as much power as New York Edison Co., more than Pacific Gas & Electric Co. Tokyo Electric probably has more customers than any strictly power & light company in the world--2,200,000.

As in the U. S., expansion by merger has been the rule in Japanese utilities, but more than one-half the power is still produced by small units supplying villages or small districts. The big companies, always grouped as the "Big Five"--Tokyo Electric, Great Consolidated Electric Power Co. (Daido). Toho Electric Power Co., Nippon Electric Power Co., Ujigawa Electric Power Co.--produce about 37% of all Japanese current sold. Although the bulk of their capital came out of Japanese pockets, each of the Big Five has sold bonds abroad; nearly $115.000,000 of their dollar issues are outstanding in the U. S. Toho Electric was hardest hit by the slumping yen, for $11,450.000 of its notes fell due last July. It required nearly twice as many yen to pay off the notes as it originally received.

In the U. S.. because franchises insure monopolies, competition among utility companies is practically unknown. In Japan the power companies often become involved in bitter price wars in selling to local distributing concerns or to big industrial users. Last winter the Big Five signed a peace pact, agreeing to respect one another's customers, to pool power at times of peak load or droughts, to refrain from building new plants without permission of the other units.

Before the War, Japan was almost entirely dependent on the U. S. and Europe for its electrical equipment. Though still relying on foreign research, the nimble-fingered Japanese now actually export. Manufacturing branches of the Mitsui are tied up with General Electric, the House of Mitsubishi's with Westinghouse. Nearly 11,500,000 Japanese homes are wired, each having an average of about three bulbs. All big cities have electric street cars and large sections of the railways, particularly the suburban lines around Tokyo and on steep mountain gradients, are electrified.*

Because the Japanese are proud of their power & light system, they are looking to Baron Goh to pull it out of the mire. Onetime head of the Tokyo Stock Exchange, he was educated abroad, is now president of the Japan Economic Federation, an organization similar to the U. S. Chamber of Commerce. His name was found on the list of "Peace Men" marked for assassination (TIME, March 28). Intensely shy of publicity, he is an enigma even to the enigmatic Japanese. But Japanese utility men agree that Baron Goh, famed as a negotiator, is the man to coax the jealous Big Five into one huge holding company.

*The Japan Year Book lists 18 tramways classified as horse-powered, nine as human-powered.

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