By the end of 1930 the depression had struck Japan with full force. It
laid the Cabinet open to attack by the rising military-fascist forces.
The most serious consequences of the depression were felt in Japan’s
foreign trade. In 1929 Japan’s export-import trade stood at 4,365
million yen. In 1930 it fell to 3,016 million, and in 1931 to 2,383
million. In two years Japan’s trade was cut nearly in half. Even at
that period, few Western countries suffered such a rapid and severe
contraction of their foreign trade.
The effects of this decline on Japan’s economy were catastrophic.
Agriculture and industry were both hard hit. The income from rice and
silk declined until there was actual famine in some rural districts.
Industrial unemployment mounted to three million, higher than ever
before in Japan. The middle-class professionals and wage-earners
suffered wage cuts, or were thrown out of work. There was general
social unrest, and Marxist doctrines won a wide acceptance. Strikes in
industry, and tenant conflicts in rural areas, became commonplace.
In the light of these conditions, the weaknesses of Japan’s economy
stood out in bold relief. Fully half the home market consisted of
poverty-stricken peasants. To put the rural population back on its feet
and enable it to buy the products of industry, drastic social reforms,
such as rent reductions and debt moratoria for the farmers, were
obviously needed. Neither the landowners nor the great business houses
were prepared to embark on such a “new deal.” The army had a different
solution--aggressive expansion abroad and military-fascist repression
at home.
This army program led to a finish fight with the Minseito Cabinet. And
the army leaders fought--and won--their campaign in Manchuria.