Up from the Bottom

The Japanese, whose postwar comeback in textiles has given U.S. and British competitors something to worry about, were making the same kind of progress in another field last week. In Tokyo, Japan's top shipping firms, who came out of the war with a total of only six seagoing ships, were advertising 23 sailings a month to Southeast Asia, the U.S. and Africa. On the Tokyo-to-New-York run, the busiest postwar route, Japan now has 47 fast (16-17 knots) new freighters.

Down to 1,300,000 tons (796 ships) at war's end. the Japanese have almost doubled their tonnage. Japanese shipyards, which had a top prewar capacity of 800,000 tons a year, now have a capacity of 600,000 tons annually. As a result, Japan is not only keeping up with the demands for new ships for her own fleet, but is producing 18 fast tankers for foreign shippers.

Change of Course. The comeback was amazing even to the Japanese. By V-J day the U.S. had sunk 80% of Japan's merchant fleet, once the world's third biggest. left it with only one passenger liner, five ocean-going merchantmen and a few hundred overworked and battered coastal vessels. SCAP also scuttled any plans to rebuild the fleet. Under the surrender terms, Japan could build no ships for herself bigger than 5,000 tons, none of them faster than eleven knots.

In 1949, the Allies decided to change course as costs of the aid program to Japan shot up. Goods shipped under the program had to be carried in U.S. bottoms, though Japanese ships (which had carried the bulk of Japan's prewar imports and exports) could have done the job cheaper. Roughly 25-c- out of every rehabilitation dollar the U.S. was sending to Japan (excluding military appropriations) was going to U.S. shipowners. Coking coal and iron ore, for example, were costing the American taxpayer about $8 to $9 extra a ton. Faced with these facts, General MacArthur lifted the restrictions in December 1949, gave Japanese shipbuilders the green light to rebuild their ocean-going fleet.

Storms Ahead. Even so, there are still plenty of storm warnings ahead. To rebuild, the major shipping companies had to resort to short-term loans from commercial banks (with interest as high as 11%) and government loans. Furthermore, shipping rates, which were boosted sky-high in 1950-51 by the Korean war, have dropped down again, and shippers expect a further slide. Warned Shimpo Asao, president of Nippon Yusen Kaisha, one of Japan's biggest shipping companies: "The future is very dark. Until world trade begins expanding there is not much hope for further recovery . . . more Japanese ships will make their way into world ports, but you can't operate in the red forever."

But if the shipowners see a storm brewing, the Japanese government sees nothing but fair weather ahead. Recently the Ministry of Transportation announced that government plans called for a 4,000,000-ton fleet by 1956, with the monthly sailings expanded to 44 on eleven routes (the same number of routes as prewar). Estimated cost of the program: $500 million, to come from a government spending program and private banks.

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