British Malaya as a Leading Source for Japanese Iron

Institute of Pacific Relations

British Malaya as a Leading Source for Japanese IronAuthor(s): Alvin BarberSource: Far Eastern Survey, Vol. 8, No. 6 (Mar. 15, 1939), pp. 66-68Published by: Institute of Pacific RelationsStable URL: http://www.jstor.org/stable/3023293 .Accessed: 12/06/2014 13:11

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact [email protected].

.

Institute of Pacific Relations is collaborating with JSTOR to digitize, preserve and extend access to FarEastern Survey.

http://www.jstor.org

This content downloaded from 185.44.77.89 on Thu, 12 Jun 2014 13:11:29 PMAll use subject to JSTOR Terms and Conditions

http://www.jstor.org/action/showPublisher?publisherCode=iprhttp://www.jstor.org/stable/3023293?origin=JSTOR-pdfhttp://www.jstor.org/page/info/about/policies/terms.jsphttp://www.jstor.org/page/info/about/policies/terms.jsp

66 British Malaya as a Leading Source for Japanese Iron March 15

such areas to exploit labor in factories, men even being taken from refugee camps for this purpose. The mere

existence of this huge labor reservoir has been in large part responsible for the low wage levels at a time when

commodity prices have been rocketing skyward. All things considered, the dismal picture presented

in the foregoing paragraphs makes it seem incredible

that tens of millions can continue to maintain a sub-

sistence livelihood, or even exist at all. The new author?

ities in Occupied China have, as the result of their

reversion to practices already abolished or in process of liquidation, been unable thus far to cope with the

numerous problems with which the former Nanking Government was grappling before the war. Nor do the

steps of more recent origin reveal even short-term

solutions.

PRINCIPAL SOURCES:

China Press; Peking Chronicle; Peking & Tientsin Times; North-China Herald; Japan Advertiser; Chicago Daily News; New York Times; Oriental Affairs; L'Asie Fran- gaise; C.LFJR..C. News Bulletin; China Information Ser? vice; Finance & Commerce; U. S. Dept. of Commerce, Commerce Reports, Monthly Trade Report: China, Auto- motive World News; International Secretariat Staff, Insti? tute of Pacific Relations, "Agrarian China," Shanghai, 1938; Lewis S. C. Smythe & Assistants, "War Damage in the Nanking Area," Shanghai, 1938; Dr. M. S. Bates & Assistants, "Crop Investigation in the Nanking Area and Sundry Economic Data," Shanghai, 1938; Hsin Htia Jih-pao, Hankow-Chungking (daily in Chinese) ; Wen IVei Pao, Shanghai (daily in Chinese).

RELATED ARTICLES: "War Hastens Chinese Railway Activity," Mar. 1, 1939; "Large Increase of Japanese Residents in China," Feb. 1, 1939; "Chinese-American Economic Relations and the War," Jan. 19, 1939; "Currency Inflation in Occupied China," Jan. 5, 1939; "Japanese-Sponsored Regimes Face Opium Problem," Dec. 7, 1938; 'The War Economy of China's Guerillas," Nov. 23, 1938; "China Driven to New Supply Routes," Nov. 9, 1938; "War Spurs and Frustrates Chinese Industrial Moves," Oct. 26, 1938; "The War and Western Interests in North China," Oct. 12, 1938; "Date Fixed for Launching North China Company," Sept. 28, 1938; "Alien Landownership Versus Open Door in China" and "Chinese Guerillas Spike Japanese Raw Cotton Hopes," Aug. 24, 1938; "Shanghai's Worst Crisis" and " 'Guerilla Industries' May Displace 'Scorched Earth' Policy," July 27, 1938; "Far Eastern Exchange Rates Dropping," June 29, 1938; "Chinese War Finance" and "North China and the United States Cotton Trade," May 18, 1938; "Japanese Enterprises in North China" and "Chinese Inaugurate New Exchange Regulations," May 4, 1938; "War in China Ushers in Mass Migration Movement," Apr. 6, 1938; "War May Revolu- tionize West China's Economic Life," Mar. 23, 1938; "New Currency in North China," Feb. 16, 1938; "China's Finances Disorganized by War," Jan. 5, 1938; "Chinese Business Re- vival Interrupted by War," Sept. 29, 1937; "China's Mone? tary Reform in Perspective," Aug. 18, 1937; "Chinese Gov? ernment Stimulates Industrial Activity," Aug. 4, 1937; "Nanking Extends Control in Harassed Szechwan," July 21, 1937; "The Bank of China Reports on Monetary Reform," May 26, 1937; "Cooperatives as a Panacea for China's Ills," Mar. 31, 1937; "Chinese Reconstruction in Practice," Dec. 19, 1936; "The Call to Reconstruction in China," Dec. 2, 1936; "Record Harvests Bring New Menace to Rural China," Nov. 18, 1936; "Rural Bankruptcy in China," Oct. 8, 1936; "The Financial Stability of the Nanking Govern? ment," July 1, 1936; "China's Tariff Autonomy, Fact or Myth," June 3, 1936; "Merchant Capital and Usury Capital in Rural China," Mar. 25, 1936; "The Recent Anti-Com- munist Campaign in China," Aug. 14, 1935; "The Crucial Role of the Chinese Native Banks," June 19, 1935; "China's Paradox?Prosperous Banks in National Crisis," Mar. 27, 1935; "The Crisis in the Chinese Cotton Industry, Jan. 16, 1935.

SIGNIFICANT DEVELOPMENTS

BRITISH MALAYA AS A LEADING SOURCE FOR JAPANESE IRON

The primary position which British Malaya occupies as a source of supply in the world tin market has tended to obscure the fact that an iron mining industry of lesser value but nevertheless of considerable propor- tions has developed there in recent years. The metal

workings of Malaya in tin and gold are of established

antiquity, but the utilization of its iron ores awaited the emergence of Japan as a major prophet of the age of steel in the East. Mining for iron is entirely a post- war phenomenon in the Malay peninsula and its growth has paralleled the expansion of the Japanese steel in?

dustry, for which it is the most important source of

supply outside the territories under Japanese control.

Malayan iron mines are financed by Japanese capital, operated by Japanese management and export their

output almost exclusively to the furnaces and smelters of the Island Kingdom. In the present situation in the Far East it is perhaps an anomaly that Chinese labor

provides the basic man power of the industry. The production of iron ore in Malaya centers in the

three Unfederated Malay States of Johore, Trengganu and Kelantan, the first in the southern part of the peninsula adjoining Singapore and the other two in the northeast. Operations in Johore, antedating the establishment of the industry in the northern states, began in 1921 under a twenty-one year concession, with privilege of renewal, obtained from the Sultan of Johore. Production was well advanced by 1924, when some 235,000 tons of ore were exported to Japan, and continued to increase rapidly until 1929, when 743,000 tons were shipped. Output in recent years has been about 600,000 tons or a little less. The Sri Medan Mine of Isihara Sangyo Koshi, Ltd., in the Batu Pahat

district, supplies most of Johore's production, and the ore, a rich hematite deposit, is of good grade. This

company has now extended its operations to other parts of Malaya and takes a leading part in efforts to expand the iron mining industry in the peninsula. In 1936

exports in Johore were increased by initial shipments from the Iizuka Mines at Bukit Langkap, Endau,


http://www.jstor.org/page/info/about/policies/terms.jsp

1939 British Malaya as a Leading Source for Japanese Iron 67

which exported about 50,000 tons in 1937. A shipping quota of 250,000 tons was set for 1938. Ore reserves are estimated at about 2,500,000 tons in the Bukit

Langkap deposit, but neighboring deposits at Sambang and Tanjong Tuan, held by the same company, have not yet been exploited. The ore, carrying about 58% metallic iron, is of somewhat lower grade than that from Sri Medan, but contains a higher percentage of

manganese, which is said to equalize the price ob? tained. Average exports of Malayan ore carry about

64% iron. In 1928 Isihara Sangyo Koshi, Ltd., began produc?

tion at its Machang Stahun Mine in Kemanan, Treng- ganu, exporting 20,000 tons. In 1930 another Japanese concern, the Nippon Mining Company, also turned its attention to the iron ore deposits of this state, operat? ing at Bukit Besi, Dungun. The combined output of the two mines soon exceeded production in Johore and in 1936 reached 1,064,000 tons. Of this amount, the Bukit Besi Mine, which is by far the larger, produced 911,000 tons. Its estimated life is very considerable, whereas the older mine at Machang Stahun has an esti? mated life of only five years or less on a much smaller

production basis. The main mineral-bearing areas of

Trengganu are confined to Kemanan and Dungun. Other deposits of iron ore besides those now worked are reported, but have not yet been prospected. The

greater portion of the ore produced is hematite, al?

though in Dungun magnetite is also an important constituent.

In the present decade the search for workable de?

posits of iron ore turned to Kelantan and, in 1935, the Southern Mining Company, Ltd., incorporated in

Tokyo, was granted an agreement for a mining lease over a considerable area near Temangan. A reserve of about 6,000,000 tons is estimated and is being devel?

oped to produce 150,000 tons yearly. Other deposits are apparently worked in Kelantan, but at this dis-

tance, in the absence of definite information, their exact nature is obscure. Low-grade limonite is re?

ported and there are indications that some of these

projects may represent an attempt to utilize the fer-

ruginous content of laterite, which is widespread throughout Malaya as a surface formation, but has been considered of little economic value. At any rate, production of iron ore in Kelantan is proceeding on a

fairly extensive scale. In 1937, when production fig? ures for this state appeared for the first time in the Annual Report of the Mines Department, Federated

Malay States, output from Kelantan was placed at

827,000 tons, against 620,000 tons from Johore and

991,000 tons from Trengganu. For the three states, combined iron ore production in

1937 reached 2,438,000 tons, representing an increase of almost 800,000 tons over 1936, the highest previous year. Of this amount, 1,539,000 tons, valued at

S$7,125,000, were exported, a slight decrease from

1936, with Japan taking all except two or three hun-

dred tons. Since total Japanese imports of iron ore in

1937 were about 5,500,000 tons, including 1,500,000 tons from Korea, the importance of the British Malay? an supply under the circumstances is obvious. This

importance seems destined to increase rather than diminish. Considerations of imperial grand strategy have lifted the production goal of the Japanese steel

industry to a figure which will require the importation of 12,000,000 tons or more of iron ore annually by 1940

(see "Australia Cancels Japanese Iron Exploitation Contracts," Far Eastern Survey, July 13, 1938), of which at least 9,000,000 tons will have to come from Central China, southeastern Asia or sources further removed. With the promising Australian supply elimi- nated as a result of the export embargo imposed last

year by the Australian Government (see "Repercus- sions of the Australian Embargo on Iron Ore Exports," Far Eastern Survey, Dec. 21, 1938) and the apparent intention of Indo-China to adopt similar measures, Japan has little choice except to cultivate intensively the sources remaining open to her.

If Japanese needs largely created the iron mining industry of British Malaya, the same driving force has spurred continued efforts to expand it. Explora- tions of promising areas have been undertaken by Japanese interests, not only in the present producing states, but in Kedah and the Federated Malay States. In the latter there is no production except about 1,000 tons annually for special local use from a hematite

deposit at Tambun, near Ipoh, Perak. Possibilities of

large-scale production here have been investigated, but without result to date. Pahang, another of the Feder? ated Malay States, has been the scene of frequent ex-

plorations, and several years ago deposits of iron ore estimated at some 8,000,000 tons were said to have been discovered. Prospecting has continued and during 1937 and on into 1938 Isihara Sangyo Koshi, Ltd., was test-

ing deposits at Ulu Rompin and Sungei Bebar, consist-

ing of a mixture of limonite and hematite. Approxi? mately 1,000,000 tons of ore have also been proved in the Gunong Lesong Forest Reserve. Altogether, Pahang is reported to offer "excellent prospects."

Prospects for the industry in the entire peninsula are affected in some measure by several adverse influ-

ences, some of them extraneous. Local transportation is always a factor and the foreign exchange situation in Japan has to be considered. Again, the small de? crease in iron ore exports shown in 1937 as against 1936 was caused by shortage of ocean tonnage and labor troubles in the mines. For this, in each case, the Sino-

Japanese conflict in China was responsible. Under the

circumstances, in an area where the Chinese form the bulk of the trading and laboring classes and especially predominate in the mines, some friction was inevitable.



68 Japan Seeking Larger Contribution from Her Mandate March 15

While an effective boycott of Japanese merchandise has been organized in Malaya, the Japanese mining companies, by offering better than average working conditions and wages, were able to keep their working forces intact until September 1937, when economic war- fare spread to the Sri Medan mine in Johore and Chi? nese laborers went out on strike. To mollify this inconvenient accession of patriotism, the Japanese management resorted to traditional methods. In con- sideration of a large increase in wages the Chinese were

persuaded to restart, but several months later they again stopped and every Chinese left the mine. Efforts to recruit Indian labor to supplement the slim Javanese force which remained met with scant success. Fore-

seeing the spread of these nationalistic strikes, the local press expressed a considerable certainty that iron ore exports for 1938 would necessarily drop appreci- ably. Available reports, while failing to indicate whether the labor situation has reached a final settle?

ment, do not bear out the prediction of declining ex?

ports, although some of the ore shipped may have been won in earlier years. During the first seven months of

1938, 791,164 tons of iron ore were exported to Japan against 697,084 tons in the same period of 1937 and

734,973 tons in 1936. In the face of an almost inevitable shortage in needed ore supply, Japan can be counted on to make every effort to keep its Malayan sources

open. Alvin Barber.

JAPAN SEEKENG LARGER CONTRIBUTION FROM HER MANDATE

Questions have inevitably risen in recent months

regarding the Japanese Mandated Islands in the South Seas. The discussion on Guam in relation to the United States defense program has focused attention on the

strategic potentialities of these islands. Germany's de- sire to reacquire colonies has caused some conjecture as to whether Hitler would be willing to strain the Berlin-

Tokyo axis by demanding the return of this former section of the German colonial empire. And the Antip- odes see in the islands' development indications of

Japan's advancing penetration of the South Seas. The 623 islands and islets of which the mandate is

composed are divided into three main groups: the Caro- lines lying parallel to and somewhat north of the equa- tor, the Marianas running north toward Japan, and the Marshalls lying east of the Carolines. Guam, United States naval station and the wayside stop of the trans- Pacific airline, is situated just south of the Marianas. The potential strategic significance of the islands from the point of view of their geographical position is con? siderable. Rumor and speculation have, moreover, long been rife as to whether or not they are fortified. Such fortification would be contrary to the terms of the

mandate, and the Japanese Government has categoric- ally stated that no military or naval bases or fortifica? tions have been maintained or built within the territory. Reports to the contrary, however, still persist as, for

example, the statements made in a recently published article in a German naval annual.

An outstanding feature of the islands' development under Japanese mandate has been the shift in popula? tion balance. Under German control colonization had been conspicuous by its absence. The most recent fig? ures (1937) give a total population of around 110,000, of which somewhat over half are Japanese as compared with only a few score Japanese residents when Japan took over the islands. This factor, according to an article by Admiral Nakamura, is of considerable im?

portance in determining the Japanese status of the

territory. It has already been noted in these pages (see "Pacific

Mandates?Asset or Liability," Far Eastern Survey, Feb. 26, 1936) that the commodity production of the islands is small in size and restricted in variety, and that the market possibilities are also limited. The

economy so far is virtually dominated by copra, sugar, phosphate and fish. Groves of palm trees cover slightly more than three fifths of the arable land and are a source of food for the islanders as well as producing about 13,000 tons of copra yearly. The planting of coconut palms has been subsidized since 1922, and in 1931 regulations were passed providing for a subsidy of one fourth of the cost of building copra-drying factories.

Sugar occupies the position of most important item in island production. Cultivation of sugar cane has been carried on for centuries but sugar refining and the manufacture of alcohol and alcoholic drinks were

inaugurated by the Japanese. In 1937 more than one fifth of the arable land was devoted to cane growing and there were three large refineries with a combined

capacity, according to the latest available information, of 4,150 tons. The most recent production figures are for 1936 and show an output of sugar, molasses, alcohol and alcoholic drinks valued at 14.3, 1.3 and 1.8 million

yen respectively. This industry has also been subsi? dized and has been the pivotal enterprise of the South Seas Development Co., Ltd., established in 1921.

The same company engages in the mining of phos? phate, but production is only about one third of the

output of the principal mines on Angaur Island in the Caroline group, where the mining is carried on by the South Seas Industrial Development Co., Ltd. (not to be confused with the company just cited). Previous to this company's formation in 1936, the Angaur phos? phate mining was carried on as a government enter?

prise. The total island output of refined phosphate in 1936 was 86,000 tons.



Article Contentsp. 66p. 67p. 68

Issue Table of ContentsFar Eastern Survey, Vol. 8, No. 6 (Mar. 15, 1939), pp. 61-74Economic Disruption in Occupied China [pp. 61-66]Significant DevelopmentsBritish Malaya as a Leading Source for Japanese Iron [pp. 66-68]Japan Seeking Larger Contribution from Her Mandate [pp. 68-69]New Land Resettlement Program for Mindanao [pp. 69-70]Germany's Buna Hits Asiatic Rubber Countries [pp. 70-71]New Guinea Mandate and Adjacent Territory to be Consolidated [pp. 71-73]Japan's Fertilizer Problem Still Unsolved [pp. 73-74]

British Malaya as a Leading Source for Japanese Iron

Documents

Transcript of British Malaya as a Leading Source for Japanese Iron