ARMY SERVICE FORCES MANUAL

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CIVIL AFFAIRS HANDBOOK

FRENCH INDO CHINA

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SECTION 8: INDUSTRY AND COMMERCE

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Dissemination of restricted matter. - The information contained in restricted documents and the essential characteristics of restricted material may be given to any person known to be in the service of the United States and to persons of undoubted loyalty and discretion who are cooperating in Government work, but will not be communicated to the public or to the press (See also par. 18b, except by authorized military public relations agencies. AR 380-5, 28 Sep 1942.)

HEADQUARTERS,

ARMY SERVICE FORCES, 22 JANUARY 1944

ARMY SERVICE FORCES MANUAL

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M359-8
Civil Affairs

CIVIL AFFAIRS HANDBOOK

FRENCH INDO-CHINA
SECTION 8: INDUSTRY
AND COMMERCE

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HEADQUARTERS,

ARMY SERVICE FORCES,

22 JANUARY 1944

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. * Dissemination of restricted matter. - The information conj r tained in restricted documents and the essential characteristics of restricted material may be given to any person known to be in the service of the United States and to persons of undoubted loyalty and discretion who are cooperating In Government work, but will not be communicated to the public or to the press (See also par. 18b, except by authorized military public relations agencies. AR 380-5, 28 Sep 1942.)

NUMBERING SYSTEM OF ARMY SERVICE FORCES MANUALS

The main subject matter of each Army Service Forces Manual is indicated by consecutive numbering within the following categories:
M1 M99

M100 - M199

M200 M300 M400 M600 M600 M700 M800 M900

- M299 - M399 - M499 - M599 - M699 - M799 - M899 -up

Basic and Advanced Training Army Specialized Training Program and PreInduction Training Personnel and Morale Civil Affairs Supply and Transportation Fiscal Procurement and Production Administration Miscellaneous Equipment, Materiel, Housing and Construction
* * *

HEADQUARTERS, ARMY SERVICE FORCES, Washington 25, .C.., 22 January 1944.

Army Service Forces Manual M 369 -

8, Civil Affairs Handbook -

French

Indo-China - Industry and Commerce, has been prepared under the supervision of The Provost Marshal General and is published for the information and guidance of all concerned. [SPX 461. (21 Sep 43)]

By command of Lieutenant General SOMERVELL:

W. D. STYER, Major General, General Staff Corps, Chief of Staff.

OFFICIAL: J. A. ULIO, Major General, Adjutant General.

This study on Industry and Commerce in french Indochina was prepared for the MILITARY GOVEBNMENT DIVISION, OFFIE OF THE PROVOST MARSHAL GNERAL

by the

FAR EASTERN UNIT, BUREAU OF FOREIGN

AND

DOMESTIC COMMERCE,

UNITED STATES

DEARTMENT OF COMMERCE

Officers using this material are requested to make siuggestions and criticisms indicating the revisions or additions which would make this material more useful for their purposes. be sent to THE CHIEfT These criticisms should

OF THE LIAISON AND STUDIES BRANCH, MILITARY GOVERN-

MENT DIVISION, PMGO, 280? MUNITIONS BUILDING, WASHINGTON 25, D, C.

some

INTODUCTION

Purposes of the Civil Affairs Handbook.

The basic purposes of civil affairs officers are (1) to assist the Commanding General by quickly establishing those orderly conditions which will contribute most effectively to the conduct of military operations, (2) to reduce to a minimum the human suffering and the material damage resulting from disorder, and (3) to create the conditions which will make

it

possible Lor civilian agencies to

function effectively.

The preparation of Civil Affairs Handbooks is a part of the effort to carry out these responsibilities as efficiently and humanely as possible.. The Handbooks do not deal with plans or policies (which will depend upon It should be clearly understood changing and unpredictable developments). that they do not imply ainy given official program of action. They are re rence source books containing the basic factual informi rather rca ation seeded for planning and policy making.

TOPI CAL

OUTLINIE

1. Geographical and Social Background

2.

Government

and Administration

3.

Legal Affairs

4. Government

Finance

5. 6. 7.

Money and. Banking Natural Resources Agriculture Indusr and Commerce Labor Public Works and Utilities Transportation Systems

8.
9. 10.

11,
12.

Communications
Public Health and Sanitation Public Safety Education Public Welfare

13. 14. 15.

16,
17.

Cultural Institutions

This study on Industry and Commerce in french Indochina was prepared for the MILITARY GOVJEBNMENT DIVISION, OFFICE OF THE PROVOST MARSHAL GEEAL by the FAR EASTERN UNIT, BURhEAU 07 FVBEIGN AND DOMESTIC COMMERCE UNITED

STATES DEARTMENT 07 COMMERCE.

0 .r.

TABLE OF CONTENTS

I.

INDUSTRY A. Main; Outlines 1. 2. 3. 4. 5. 6. 7. B. C. Handicrafts Chief Types Alcohol Textiles Cement Chemicals Potteries

1 1 2 5 9 13 16 17 20 21 28

Legal Regulations Effects of the War on Industry

II.

COMMECE
A. B. Domestic Trade Foreign Trade

31
31 35

1,
2. 3.

Balance of Payments
General Trade Statistics Trade in Principal Commodities Trade with Principal Countries Indochina's Trade with the United States Limitations of Foreign Trade Statistics Export Subsidies and Dual Price Systems Wartime Changes in Indochinese Trade Indochinese Wartime Imports

36
38 39 45

4.
5.

6. 7. 8.
9.

47 49 50
53 56

I . II. III. IV. V.

Number. of Artisans in

French Indochina

4 33 36

Variations in Cost of Living in Saigon and Hanoi Per Capita Foreign Trade in Southeast Asia, India and China French Indochina: Balance of Payments Value of Imports for Consumption and Exports of French Indochina Products

37
39

VI
VII. VIII. IX.

Imports of Principal
Exports of Principal

Commodities
Commodities

41
42 43 44 46 48

Principal Indochinese Imports and Exports of 1940 Indochinese Exports under Japanese Occupation Trade with Principal Countries Trade with the United States by Principal Commodities BIBLIOGRAPHY

X.
XI.

INDUSTRY AND COMMERCE in FRENCH INDOCHINA

I.

Industry

A.

Main Outlines French Indochina, like most relatively undeveloped countries of

the world, presents glaring contrasts in its industrialization. There are a number of modern industrial plants, among them a cement plant and several alcohol distilleries, which are abreast of 20th century technical developments in their lines. The great majority

of Indochinese engaged in "manufacture" are, however, simple artisans, using the primitive spinning wheels, treadle looms and potters' wheels which their ancestors have used for centuries. French con-

cerns, ordinarily monopolies or near monopolies, operate the large factories, while the Chinese and some Indochinese and others have a few small factories. In Indochina, as in other undeveloped Oriental countries, small factories play a much less important role than in ized nations of the west. the more industrial-

The workshop of one generation has not

tended to become the small factory of the next, for the Annamese proprietors of workshops have never been able to accumulate the necessary capital. Annamese, It is true that there are a number of wealthy

but they are usually owners of large agricultural estates, It therefore seems unlikely that

with little interest in industry.

-2-

private Annamese capital will play an important role in

the industrial-

ization of the country in the present generation, for except in the case of distilleries, there are not the small-scale Annamese-ownied industries which show promise of ext. anding and taking the place of the large French (and now Japanese) concerns. Annamese have, however,

done better than Burmese or than Thai private enterprise'in industrialization,

1.
Bulletin

Handicrafts: conomi ue

The following table from the official deltndochine, 1939, may serve to give a fair

idea of the importance of handicraft industries, though it is probably incomplete as are manr statistical tables relating to Indochina, For exnple, industry in the table lists but 90 artisans engaged in the textile population It is coimnon

the large province of Laos, with much of its

beyond the easy reach of roads or navigable waterways. knowledge that most of the clothing used in is

'such remote areas,

throughout the frient, cotton, It is

manufactured by hand from locally-grown therefore, that the true figure should be

surmised,

many times greater than that given, as should most of the other figures for Laos, and perhaps for Annam,as well. The more highly" being more accessible

developed provinces of Tonkin and Cochinchina

to census-takers except for mountainous areas in northern and western Tonkin, the figures are probably more complete for these provinces.

-3-

From the table it would appear that 60 percent of the total

handicraft workers in Tonkin were engaged in the making of textiles. This is interesting in view of the fact that most of Indochina's textile factories are also in Tonkin, and their workers should not have been classified as "artisans," or included in the accompanying figures:

Uogvoij,4

Table
Number
ofb

r Artisans in F~ench Indochina

Name of Principal Handicraft Industries Basket making Woodworking Textile industries Embroidery Lace-work Leather and tanning

Tonkin

Total number of workers by trade CochinChina Cambodia Laos Annam 27? 2,783 2,988 62

Total

15,521
1,426 56,850 2,315 2,833 1,057 l,113

357

416 911 1,029

53
265

16, 624
9,732 61,260 2,479

4,347
303

90 16

81

2,9833
117 277 1,554

4
40 169

1,464

Metals
Silversmith & jewellery Paper (religious votive objects)

994 333
41 460 20 427

189 59

3,920

471
2,771
522

8143
97 1145

1,875
2,909

Pottery
Mother-of-pearl

788

2,9019 252

tation-buttons)
Food-processing Miscellaneous (hat-making,

(incrus-

232

1, 001

193 10, 837

56

1,680
3687 143,9~04

lac-works, dyeworks, etc.

Total

9,525 95,670

11,96
15,323

384
225 1,

12,652

19, 0314

The backward condition of an econony like that of Indochina, with its principal dependence upon handicrafts, makes it much less

vulnerable in tions.

time of war than the economies of more advanced nait is the urban population, and the more well-to-

Moreover,

do rural residents whose living standards include the largest proportion of machine-made and foreign goods. It is unlikely, there-

fore, that the great majority of Indochinese will suffer greatly from lack of the few commodities which make up their always-meager standard of living.

2.

Chief Tes:

Indochina's relatively few factories may be

classified under the following three headings: a) b) Factories processing raw materials for export, Factories processing native products for the local market. Factories using chiefly imported materials, producing for the local market. and

c)

Ricemills,

sawmills and rubber-treating factories are leading largely for export. group (a) above is

examples of factories processing raw materials, The only other industrial plant of importance in

the cement factory at Haiphong which operates chiefly with domestic material, and normally exports about half its output.

The chief examples of factories processing native products for domestic use are alcohol distilleries, beverage plants, industries, cotton gins and potteries. chemical

In most cases only part of imports account-

the Indochinese demand was met from these factories, ing for the remainder.

The textile industry, which imports large quantities of cotton

and some cotton yarn, was the chief

example

of the Indochinese

in-

dustry

dependent upon foreign imports.

Probably some branches of

the chemical industry and the

small

candle industry come under the

same heading.
The chief companies with factories in Indochina before the war, with addresses where available,
a) Textiles-

were

as follews:

Societe

77 Rue des Voiles, Hanoi, Tonkin, Quxai Sisowath, Pnom Penh, Cambodia, 30 Blvd. Charner, Saigon, Cochinchina, Avenue de Musee, Tourane, Annam, Haiphong, Tonkin. Nam Dlinh, Tonkin.

Cotonniere du Torn

Societe des Filteries d'1 dochine, Lune-Cheong

191 Rue

Marechal

Foch,

Nam Di*,

Tonkin.

Phut-La-".Than, 262 Rue Marechal Foch, Namn Dinh, Tonkin, Societe Industrielle Textile h Rue de la Soie, Hanoi, Tonkin. Transilinh
12 Rae Serviere, Langson,

Tonkin.
de la Soie.

Societe Franco-Aiamite pour l'nuti b) Tobacco: (all at Saigon and Cholon)

Coloniale des Tabacs.

Compagnie

Compagnie Franco-Annamte des Tabacs. Compagnie Indochine des Tabacs, Manufactures Indochine de Cigarettes., Societe Indochinoise des Tabacs, Cigar et Cigarettes J, Bastos.

-7_.

c) Beer arnd other

beverages:

Brasserie Lamue, Saigon and Cholon. Brasseries et Glacieres d'Indochine, 6 Rue Paul Blanchy, Saigon. The Crystal Aerated Water Factory, 115 Blvd. Bonnard, Saigon, Societe des Faux Gazeuses d'Indochine, Marne, Saigon. Quai de is.

Etablissenients
d) Distilleries:

Boy Landry,

15 Place du Theatre,

Saigon.

(Including ethyl Alcohol)

Societe Fraricaise des Distilleries de l'Indochine, (Office) 117 Rue Richaud, Saigon. 55 Blvd. Gaxnbetta, Hanoi. (Office) Societe des Distilleries Lazet d'Indochine, 12 Rue Paul Beau, Cholon.

Societe des distilleries Tonkinoises,

28-3h Quai Clemenceau, Hanoi.
Nguyen van Mao, 59 Rue de Ha-.Trung, Hanoi, Van-Lieng, Chanh-Hung, Cholon, Tran- Trinh-Trach, Quaif Rigault.de-Genouilly, Baclieu, Cochinchina.

Societe Vinh-Loi-Nguyen,
An-Hbi, Bentre, Cochinchina,
Mmffe

Vye Scalfi, PI-uoc-Thien, Bienhoa, Cochinchina.

Tia-Hoc-Heng, Chau-Phy, Chaudoc, Cochinchina, Truong Ngok .Nhieu, Delegation de Thotnot, Longxuen, Cochinchina. Societe Anonyrne des Distilleries Annmiites du Sud de l'Indochine C china. Tan-an-Tay, Vinhlon

-8-

d) Distilleries: (continued) Societe des Distilleries des Alcools Indigenes do VanVan-Baca-Ninh, Bac-Ninh, Tonkin, Societe Industrielle et Coimerciale d'Annam Rue Gia-Hoi, Hue, Annan. Societe Anonyme des Distilleries du Centre-Annam, Boite Postale No. 39, Quinhon, Annam. Distilleries Nam-Dong-Ich Societe Commerciale et Industrielle, Anxiam-Tonkin,

Thanh-Hoa,

Annam.

Hap-Hoa-Long, Banam, Preyveng, Cambodia. e) Cement: Societe des Ciments Portland Artificiels de l'Indochine, Haiphong. Societe des Chaux Hydrauliques du Lang-Tho Hue
f)

Flour- milling

Machinr:

J, Cairns, 63 Rue Lefhebvre, Saigon.

Societe

Indochinoisede

Materiel Mecanique,

22 Rue Catinat, Saigon.

g)

Matches:
Societe Indochinoise Forestiere et des Allumettes, Ben Thuy, Annam (Branch office, Paris).

h)oa:

Societe'des Dlistilleries Saigon.

102 Quai

Mazet

d'Indochine, e-rient,

HuileriLes et Savonneries d'Exr

de la Mane', Saigon,

Societe d'Ameublement et de Produits d'Hygiene d'ExtremeOrient,

h5 Rue Harmand,
Aim Macca,

Haiphong~

89

Rue du Commerce, Haiphong.

iOxygen and Acetylene Gas: Societe d'cbry et d' Acetylene d' Extreme-Orient, Rue Heurteaux, Khanh4loi, Saigon. Tan Dan, 14$ Blvd. Chassieux, Haiphong. It will be noted that there~ are a number of Annamese and Chinese names among the companies listed above. est companies iere abuost always French. However, the larg-

There were interrelationbut to what extent is not

ships between the various French firms,

known.

One report states that river transport, rubber plantations,

tobacco manufacture and the construction industry were represented in one French combine still doing business in Indochina.

3.

Alcohol:

Closely connected with the rice industry is the The Societe des Distilleries de 1'Indochine

distillation of alcohol,

dominates the field with its five large plants, situated at Haiduong,
Ranoi and Tam Dinh in

Tonkn,, at Cholon in Cochinchina, and at

77
yr 4 ., Y 'i. 4

- 10

Pnom Penh in Cambodia.

Approximately 145 other modern-type distil-

leries were operated by Chinese, French and Annamese capital.,/ Shepherd estimated the total number of employees as h,O0O as h03,000 hectolitres annually, and: "associated wvith the distillation of alcoholic beverages from rice is the manufacture of rum from sugarcane, as well as of a number of by-products including power alcohol, rice, vinegar, lactose and rice flour." / The distilleries in 1938 were classified as follows: Five large plants of the Societ6 Fran 9aise des Distilleries and output

de 'Indochine.
One large plant of the Societe des Distilleries Mazet, Cochinchina. One large plant of the Socite Anonyme de Battambang, Cbodia. Twenty Chinese and Annamese distilleries in Cochinchina and Cambodia. Nine distilleries under control of the native-owned Societ loonyme des Distilleries Arnamites du Sud de l'Indochine. Seventeen distilleries in Annam controlled by the Societe Industrielle et Commercielle d'Annam, or the Societe des Distilleries du Centre-Annam or the Distilleries Nhieu-Ba. Three Annamese distilleries in Northern Annam and Tonkin, belonging to the Soci6te Anonyme des Distilleries Annamites de 1'Annam-Tonk, Three other Annamese distilleries in Northern Annam and Tonkin. 1/ Jack Shepherd, Industry in Southeast Asia, page. 19.

~/ 2/

Ibid.
"L'Industrie de L'Alcool en Indochine," Bulletin economique de

l'Indochine, 1938, pp. 957-965.

This article had pictures of the five plants of the leading company, which company appears to have been responsible for the article.

11

In 1938 the capital of the

Societe

des Distilleries de 2'Indo-

chine was 75,000,000 francs, plus 25,000,000 francs for associated companies. The company which probably stood second -Societe des

vistilleries Mazet d'Indochine, or 6,000,000 francs.

had a capital of 600,000 piastres, The capacities of

It also manufactured soap.

the five leading plants, per 24 hours, were as follows: Hectoliters Plant per 24 hours

Cholon 2/
Nam Diil

750
350

Haiduong
Hanoi Russey-keo

300
160 90 E, W, Nelson

A Board of Economic Warfare interview with Messrs. and L. C. Dennis, who returned in Indochina,

19h2 from work with the Standard

sheds light on recent development in

Vacuum Oil Company in this field.

The interview

took place in New York on March 1i0, 1943,

and the report read as follows:

"In

1936 the Distilleries de l'Indochine,

a French enter-

prise in Indochina engaged primarily in the

distillation

of alcohol for human consumption was requested by the French Government to establish and erect dehydration plants for the production of industrial alcohol, In return the Government agreed to impose an admixture of 10 percent of alcohol to all gasoline sold to motorists. in other words, Standard Vacuum Oil and its competitors were no longer able to sell pure gasoline, but were forced to include a 10 percent admixture of alcohol 0 In 1939 the admixture of alcohol imposed on the sale of gasoline was increased to ls percent,

~/

In 1938 it appears that production of dehydrated alcohol for motor vehicles was concentrated in the Cholon and Haiduong plants. The foregoing figures differ somewhat from other available figures on alcohol output, but are at least

approximately

correct

12 -

"Distilleries de l'Indochine established two such dehydration plants, one at Cholon near Saigon, and one at Haiduong in Tonkin between Hanoi and Haiphong. In addition..........the French Government... ... purchased two other plants of the Distilleries de l'Indochine -- one at Namdinh in Northern Annam and one at Pnom Fenh. These two latter dehydration plants did not go into operation until early in 1941 when the oil companies were already failing to supply Indochina with sufficient fuel. "Meanwhile in July 1940 the admixture of alcohol imposed in the sale of gasoline had been increased to 25 percent and in May 1941 it was increased to 50 percent. "The four plants above mentioned were the only ones in Indochina producing dehydrated alcohol for industrial use. Their aggregate capacity was approximately 250,000 gallons per month, 1/ divided equally between the four plants, the This output units being exactly similar one to another. of 250,000 gallons per month was approximately sufficient for a 35 percent admixture to the gasoline sold in Indochina under prewar conditions, but by May 1941 when the admixture was increased to 50 percent, the stocks of gasoline were fast dwindling, rationing had been instituted, and the indusalcohol available therefore sufficed for the required trial 50 percent admixture. "After the supplies of gasoline ran out, motor cars used Meanwhile there had been a straight dehydrated alcohol. strenuous.effort to introduce gasogene equipment. However, the total production of 250,000 gallons of industrial alcohol per month was all required -- and still was not sufficient -- for motor cars not converted to gasogene, and for river boats, stationary engines, etc., with Indochina, assuming that any normal transportation and other conditions were to be maintained. (Earlier quantities of industrial alcohol had been imported to supplement the production with-

in Indochina), "None would be available for export from Indochina except at

the sacrifice of transportation facilities within the country. There was no equipment in Indochina to provide for an increase in the production of industrial alcohol. In other words, Indochinese capacity in industrial alcohol production will have remained at approximately 250,000 gallons per month, unless the Japanese have moved additional equipment into Indochina to increase the productive capacity. 1/ Former Vice Consul Hamilton's comment is: "The capacity of 250,000 gallons monthly may be low. There is some reason to believe that it may be at least twice a

13

alcohol (not dehydrated) "A very poor quality of industrial was being produced in some quantity in the sugar refineries of the Societe des Sucreries et Raffineries de 1 Indochine," In 1942 it was estimated that gasogene equipment plus dehydrated etc.,

alcohol supplies permitted an operation of motor vehicles, equal to 60 percent of normal,./ 1943 is estimated at 20,000 tons. The full

alcohol production in

For further

information on the
de l'I ndochine

plants of

LaSociete Francaise des Distilleries

see the article in September 1938 issue of BuJlletine economique de 11'Indochine.

h.
industry,

Textiles: in

Indochina had a surprisingly large cotton textile that it normally produced only five consumed annually,

view of the fact

percent of the raw cotton necessary for the textiles and hence the textile

industry depended chiefly on imported material.

Large quantities of raw cotton and cotton yarn are imported annually
for the use

of

Indochinese

factories

and weavers.

Vice Consul

Hamilton has described the cotton industry as follows:

"Considerable spinning and weaving for family use is

ried on in

still carvarious parts of Indochina. Manufacture, however, is centered in Tonkin where there are mary small family workshops in addition to the mills, Nevertheless the cotton industry in Indochina is limited. Spinning is actually monopolized by two French firms in Tonkin, the Societe Cotonniere du Tonkin and the Societe Filtenies de l'Indochine, capital of 8,000,000 piastres in Cambodia, two spinning mills a weaving mill with annexes in Kamdinh,

"The Societe Cotonniere has a and possesses a ginning mill in Haiphong and Namdinh, and (bleaching and dyeing works)

I/

Hamilton, op. cit.

Cotton and Cotton Manufacture in French Indochina, Feb. 15,9.

"The Soci6t6 des Filteries has a capital of 00,000 piastres and possesses a spinning mill at Haiphong with 1L3,000 spindles. Production of thread in recent years has been: Years 1937 1938 1939 1940 (10 months) Metric tons 8,280 8,430 11,260 10,230

"This is in addition to an annual production of 50 metric tons of sewing thread suitable for haberdashery. tiThe weaving industry consumes from 12,000 to 13,000 metric tons of cotton thread annually. In 1939 the Societ6 Cotonniere produced 3,28h tons of various kinds of cloth unbleached, bleached, dyed -- and about 1,000,000 blankets. The Soci6t6 des Filteries has established a branch, the Soci6t6 des Tissages, which is expected to produce about 100 tons of cloth in 19h1. However, most of the cotton goods are produced in native workshops and homes possessing about 60,000 hand looms almost entirely in Tonkin and a few mechanical looms in Hanoi, Haiphong, and Namdinh. These workers consumed about 9,000 tons of thread in 1939. "The total production of cotton cloth in 1939 was something over 12,000 tons, In addition to cloth and blankets the Soci~t6 Cotonniere also produces annually about hO0 metric tons of carded cotton, sterilized cotton, ard bandages. "So far as may be estimated from available data, the annual consumption of raw cotton and cotton cloth in Indochina is about 15,000 and 20,000 metric tons respectively." Since most of Indochina's raw cotton imports cane from India and the U.S.A., from which it can draw no cotton under present conditions, and since Japanese cotton developments in North China and Manchuria seem unlikely to produce a :surplus supply above minimum requirements of Japan and China, it may be that Indochina must be less adequately clothed during the war. It is thought that if large quan-

tities of textiles, or of cotton, were being shipped to Indochina there would be some reference to this fact in the intercepts or other sources of information ncw available, but very little this subject has been received.91 information on

-15

The Japanese are believed to have sent small quantities of textiles to French Indochina but there is no reason to believe that it is at all comparable to the quantities normally imported. Moreover,

Indochina ordinarily imported nine to fifteen thousand tons of raw cotton annually, practically all of it from areas not now occupied by Japan. There have been numerous Japanese and Japanese-sponsored broadstimulating cotton production, but

casts which have reported success in

their wildest claims do not suggest a production which approaches prewar imports of raw cotton alone, let alone compensating prewar textile and yarn imports. It, therefore, seems likely that the textile mills of

Indochina are operating at only a small fraction of capacity. Silk ranks a poor second among textiles in hectares of land were devoted to silk culture. Indochina. / However, About 3,000 most of the

raw silk consumed by Indochinese looms was imported. The decline of Indochinese sericulture has been striking since 1929. The competition of rayon and the consequent lowering of the price Moreover, Chinese raw silk, with the

of silk discouraged producers.

added impetus of that country's currency devaluation, has been entering Indochina in ever increasing quantities. craftsman's product it Together with the village

largely supplies the French factories which are 2/ The one at Nam employs

chiefly devoted to weaving.

There are only two silk factories in Indochina. Dinh has had to close down most of its about 800 workers. 1/ 2/

spinning mills; it

Employing more than 1,200, the other strangely

Gourou, L'Utilisation du sol en Indochine Francaise, This paragraph and the following quoted from a forthcoming book, The Economic Evolution of French Indochina, by Charles Robequain. To be published about April 19h by the Institute of Pacific

Relations.

enough is

not located in

city.

It was built

at the end of the last

century in the open country at Phu Phong on the road from Kontum, in the Binh Dinh Province, The site

Qui Nhon

to

was selected by the activity,

founder because it

was the center of extensive sericultural

which however has since

diminished.

Nevertheless the enterprise has

served to stimulate attempts to revive and improve bombyx raising. It provided work for a great many spinners scattered throughout the neighboring villages and even at for example a great distance from Phu Phong, the Quang Nam. as

around Ky Lam, west of Faifo in

Indochinese

raw silk makes an irregular thread which is woven into light roughtextured materials or tussores. But the native silk production is used by

quite inadequate for Indochina's needs. the Nam at Dinh and Phu Phong factories Shanghai, These silks

Most of the raw silt

comes from Chinese spinning mills 'which furnishes a more uniform are made into a wide variety of rayon; a good many

Canton and especially at quality product.

and better

of fabrics some of which contain an admixture of these fabrics are sold in

Indochina to natives

or to the Europeans

who follow closely the whims of Paris fashion and demand a great variety of constantly changing styles.
Phu Phong mill was estimated at

The 1937 production of the

517,000 meters,

5.

Cement:

The Socie6te

des Ciments de l'Indochine has a large

and well equipped plant in annual capacity of

of "superciment.'

the western part of Haiphong which has an tons of

125,000
It is

ordinary

cement and 175,000 tons

in the Far Eastern

described in

some detail

a 17 u
August 1922,
t the Bulletin Economique de 1l ndochine,

Review,

and in

1939,

pp.

L7

ff.

There

is

equipment for automatic bagging, and the 12,200 ksw 0

power p'lant had a capacity of at least

The company had

junks which transported most of the limestone, behind the

plant is

clay, etc, from pits Since the

from the docks it is

tL' Ile des deusx Song" and other localities.

along the river, not a great distance

situated

which are known to probable that plant were still it

have been bombed. by the American. Air Force,

was damnaged.

Indeed, after

it

would be surpr._

7 ng if

this

able to operate

the long series of American air the last part of 19h3 0

raids on that ara.of the ci-ty,

reported in

A rug factory at H{aiphong employs hand-made knots, Coconut-fibre

600

workers who weave rugs with

sparterie works in Tonkin have about a

thousand employees,

and previously exported mats to France.

The Japanese have reportedly secured a majority of the voting stock in this company and are sending over 10,000 tons of cement
Indochina and other regions for use in the con-

monthly to

Southern

struction of airfields.

6.

Chemicals:

Indochina is

a fairly .

large consumer of chemicals, some manufacture and fishing by-

most of the supply being of certain essential oils, products.

imported

However, there is fertilizers

crude products,

Exports are negligible.

O-ygen, acetylene, carbon dioxide

and absorbent carbons are produced in ties to satisfy local demand0

approximately

sufficient quanti-

Sodas, decolorizing chlorides and red

-18

lead are produced in small quantities while miscellaneous chemical production includes explosives, particularly for use in mines, fire-

works, matches, fertilizers, vegetable oils, soaps, perfumes, paints and varnishes. Handicraft industries produce native medicines, dyes

and tanning materials from Indochinese plants.

Tonkin with most of the country's coal and other minerals,

most industrialized section of Indochina and therefore is

is

the

the leading

consumer as well as producer of chemicals, also produce and consume fair production of soap, textile varnishes quantities. and chemicals It

although Saigon and Cholon Tonkin specializes in the the

and explosives used in

and mining industries.

also produces

quantities of phos-

phatic fertilizers.
in

Since most of the country's rubber production is

the Saigon area the chemicals used by that

chiefly in oxide.

industry are produced and Saigon and Cholon along with oxygen, acetylenej/carbon dialso have some soap factories, oil plants,

These twin cities

and paint and varnish factories. The production of explosives in 1940 amounted to 119 metric tons.

Local pyrotechnic proclivities are shown by the manufacture of metric tons of fireworks.

549

Match production was concentrated in two factories in Tonkin and one in Cochinchina which produced 210,000,000 boxes of matches con-

taining about 4o matches each in 1940, out of a country-wide total for

that year of about 300,000,000 boxes. were imported from France. Indochinoise Forestiere et The chemicals for match manuThe leading manufacturer, was capitalized at

facturin Societe

des Allumettes,

9,104, 000 francs.

S19

Saigon and Haiphong produced industrial 185,000 cubic

gas amounting in

19h0 to

meters

of oxygen,

141,000

cubic meters of acetylene

and

52 metric tons of carbon dioxide.

The fertilizer industry of

Tonkin consists almost wholly of grinding and preparation of'

nat-

ural phosphate, ing to 36,677

in

1939 production of processed raw phosphates amounttons, The apatite now produced by the Japanese

metric

great quantities from the Lao Kay mines requires more processing available in abroad, the center of the soap industry, annual prewar Indochina and is therefore exported for manu-

than is
facture

Cochinchina is

production of laundry soap being about 18,000 tons, while 60,000 cakes of toilet soap were produced annually, The largest factory

located in annually,

Cholon produced from six

to seven thousand metric tons

This was the Huilleries et Savonneries d'Bxtreme Orient,

which had a capital of ports, but it is

t.00,000

francs,

according to available re-

possible that

00,000 piastres was the figure intend-

ed (one piastre equalled ten francs).

Alim Macca, Haiphong

merchant
Societe.

and soap

manufacturer,

had a eapital of

300,000 piastres,

d'Ameublement et

de produits d'Hygiene d'Extreme Orient,

of Haiphong,

had a capital of 5O,0OO piastres,and carried on soap manufacture with trade in soaps and chemicals generally, pitch and turpentine were produced

A small amount of pine oil,

and used locally, except that there was a small annual eqort of turpentine,
resins,

The extensive forests of the country provide natural

including benzoin, oleo resin, lac-

grums, waxes and balsams,

- 20 -

quer, beeswax and sticklac. gaged in there is

There are no important factories enhowever. Similarly, gamboge,

the processing of these materials,

no important processing of the quinine bark, opium,

areca nuts, aniseed, tamarind seeds and nux vomica, which are produced locally. There are a number of small tanneries and dyeworks gallnuts and other forest prod-

which process indigo, mangrove bark,

ucts, while native handicraftsmen secure large quantities of dyes for the processing of their own clothing. Recent reports suggest the erec-

tion by the Japanese of a factory near Langson for the manufacture of calcium carbide. Moreover there is a report of the Japanese intention The carbide fac-

to recover carbon black from remanufactured rubber. tory is said to cost the equivalent of U.S.$250,000.

There is much small-scale processing of locally-grown tobacco, but the five large plants are all located at Saigon and Cholon. largest, the Manufacture Indochinoise de Cigarettes, with the British-American Tobacco Company, its is The

affiliated

three leading employees paid part

formerly coming from the staff of that company, to which it of its profits. 7. /
industry

Potteries:

An interesting handicraft/centers around the potat the northeastern tip of the country. It

tery workshops of Moncay,

is described in detail in the September 1939 issue of Bulletin Economique de l'Indochine. In order to escape the Indochinese import

duties, a group of Chinese master potters established large workshops on the Indochinese side of the border in 1910, and employed 300 Chinese laborers. l/ The laborers ordinarily live in China and walk

Industry in French Indochina, United States Tariff Commission, November 1943.

21 -

daily to the workshops. sils

Their products consist of both simple uten-

for ordinary use and beautiful porcelain, from the good quality The. Moncay district sent to the rest of

kaolin available nearby.

Indochina a total of 18,000 metric tons of pottery and porcelain in 1938. A cooperative selling organization markets much but not all Eight leading manufacturers formed a company to of

the Moncay output.

"stabilize" the market, both as to production and sale, but the four other manufacturers, with eight percent of the total sales, 1938. refused

to cooperate ard increased their output in

B.

Legal Regulations The Government of Indochina gave full scope to private industry

--

particularly French industry, and the setting up of a "Council of August 1941 was for the purpose of promot-

Industrial Production" in

ing small manufacturing industries and native craftsmanship rather than putting Government directly into industrial production. The fol-

lowing excerpts from a consular report outline the functions of this Council: "This council is composed of members appointed by the Governor General and chosen from the leading industrialists of the country. It is presided over by the Inspector General of It comprises Mines and Industry and meets at Saigon or Hanoi. northern and southern sections, each divided into two subsections: manufacturing industries and minor industries. "The council will study all problems relating to the Indochinese industrial production; submit projects regarding the manufacture of products for which local resources may permit a rapid development, particularly the production of commodities interesting this country's economic system; and draw up a general program for the intensive industrialization of For this purpose the council is authorized to Indochina. have the necessary technical studies and experiments carried on at Government expense.

-22

"The following persons have been appointed members Council of Industrial Production:

of the

For the Northern and Southern Sections The Inspector General of Mines and Industry A delegate of the Director of Economic Services Chairman Member Member

A delegate of the Inspector General of Public*Works A delegate of the Inspector General of Agriculture, Stock Raising and Forests The Chief of the Service of Mines

Member Member Member

The Chief of the Industrial and Armament Services

For Northern SectionOly M, P6tot, Manager of Soci6t6 des Papeteries

de l'Indochine, fap Cau, Tonkin M. Drouin, General Manager of Soci6t6 Indochinoise d'Electricite, Hano, Tonkin

Member

Member

M. Chatot, Manager of Soci6te Indochinoise Forestiere et des Allumettes, Hanoi, Tonkin His Excellency Ho-dac-Diem, tong-doc of Hadong 1 Pham-le-Bong, Annaite industrialist, Hanoi

Member Member Member

For Southern Section Only

M. Daoz, Manager of Societe Financiere Francaise

et Coloniale, Saigon M. Coursin, Manager of Societe des Forges et Ateliers et Chantiers de L'Indochine, Saigon M. Truong-van-Ban, Annamite industrialist, Saigon A delegate of the Cochinchina Chemical lasso. Member

Member

Member Member

~R~lrs~rss

23

"Native Craftsmanship Committees: Native craftsmanship comttees have been established in Tonkin, Annam, Cochinchina, Canbodia, and Laos. These committees will study measures to be taken in order to increase the volume and improve the quality of products manufactured by native craftsmen. They will assist native industries to better their working methods; to obtain regularly the required raw materials; and to sell their products. These committees will also be controlled by the Inspector General of Mines and Industry." Foreign corporations were ostensibly free to make a declaration at the Registration Bureau, deposit Article's of Incorporation with the Clerk of the Court, and carry on most types of business on an equality with French firms. Shares of such companies issued or sold

in Indochina were subject to a Stamp Tax, and when the stock changed hands, to a Transfer Tax. There were also taxes on dividends paid

in Indochina, while corporations like other businesses were subject to annual "license" (patente), Foreign corporations were treated like

French corporations for purpose of the foregoing taxes. Foreigners and foreign corporations, however, could not engage

in the following businesses without special authorization by the Governor. General: Customhouse broker Forward arnd transportation agent Ship broker and ship agent Legal attorney Commercial information agent Immigration and emigration agent Registrar officer Ship chandler Surveyor Hotel and public house keeper Arms and ammunition dealer Manufacturer of, or dealer in radio sets, equipment or parts Printer Editor and bookseller

24 -

No foreigners or foreign corporations could acquire agricultural or mining concessions unless otherwise provided in ventions. However, diplomatic con-

the corporations with a majority of French capital spite of foreign

and management could acquire such concessions in minority interests. Under the terms of the decree dated June 15,

1933,

a foreigner

desiring to work in any public or private undertaking must obtain advance authorization to do so. A request for such authorization had

to be addressed by him or his prospective employer to the head of the appropriate local administration but final decision was made by the Governor General. The maximum proportion of foreigners of European nationality or assimilated thereto ("assimilated" covered Americans, etc.) which might be employed was: 1. Public Works: Twenty percent of the total number of Europeans (including French)employed if the project amounted to 50,000 piastres or more. Estates: (Rubber, Coffee, etc.) Ten percent of the total number of Europeans if the concession measures 300 hectares (750 acres). Private Industrial or Commercial Undertakings: percent of the total European personnel. Mining: Ten percent in mines of hydrocarbons, percent in other. Ten Japanese, Thai,

2.

3.

h.

five

Calculations were based on the total number of Europeans employed in each undertaking without regard to the nature of the individual If any enterprise engaged in more than one country calculation was based

work performed. (province)

of the Union of French Indochina,

T e~sHBSlSBStBtS~

25 -

upon the total European personnel employed in the whole of Indochina. Should less than five Europeans be employed in any enterprise of the first three classifications listed above, one foreigner may be employed if there is already at least one French employee. The Gover-

nor General could authorize employment

of specialists in exception-

al circumstances in excess of the above proportions. A decree of February 10, 19h1, reported by the American Consulate, provided that no business, industry or other enterprise could

be established in any part of Indochina, as a branch or otherwise, without the approval of the head of

the

local administration of the

country or of the Union of Indochina in which the enterprise is to be established, So far as is known, there were no subsidies for industrial production, although there were several export subsidies, low, and a type of agricultural subsidy. Patents, Trade Marks and Copyright:/ There is no specific discussed be-

legislation respecting patents, trade marks, copyright, etc., in French Indochina, The private property rights in these are governed French industrial, intellec-

by the law respecting them in France.

tual and artistic property law is applicable to the-colonial possessions, Information respecting the pertinent provisions of the laws

of France regarding these matters is as follows:

~/

Courtesy of J. L. Brown, Adviser on Industrial Property, Bureau of Foreign and Domestic Commerce.

26 -

Under the provisions of the French law of June 23, 1857, as amended, no one can claim the exclusive property in a mark of trade or of commerce unless it has been registered. The first user of a trade-mark will be entitled to its registration and exclusive use. There are considered as trade-marks: denominations, emblems, imprints, stamps, seals, vignettes, reliefs, letters, figures, wrappers, and all other signs serving to distinguish the products of a factory or the objects of commerce, including the names of individuals or firms represented in a distinctive manner, the signature of the applicant or his predecessor in business, coined words, and distinctive designs, drawings, or numerals, either alone or in combination with names or special words. The provisions of the trade-mark law are applicable to products of agriculture as well as of industry and commerce. Foreign trade marks may only be protected in France if they have been registered in the home country of The right in the trade-mark when obtained the applicant. in France will only be coextensive with the right in such home country. Commercial names are protected without the necessity of registration. The registration of a mark will be in force for 15 years; however, renewals may be obtained indefinitely for like periods. The transfer of property, assignment, concession of the right of exploitation, or pledge of a registered trade-mark will be effective as regards third parties only when duly recorded in the special register of marks of manufacture or of commerce, maintained in the National There is in force Office of Industrial Property at Paris. Ala classification of merchandise divided in 80 groups. though a single application may cover goods falling in more than one class, extra fees must be paid for each class beWhen an application is filed, registration yond the first. will be granted automatically without examination and notice thereof will be published in the Bulletin Official de la Propriet6 Industrielle et Commerciale. Trade marks which have been registered in contravention of the law may be canceled at any time by a proper proceeding brought in the courts. All foreign products bearing either the trade-mark or the name of a manufacturer resident in France, or an indication of the name or of the place of a French factory, will be denied entry and excluded from transit and storage, and may be seized at any place whatever, either by the customs authorities or upon the request of the Public Ministry or the injured party.

- 27-

Goods bearing trade marks or representations which may lead to the impression that the goods are of French origin will be prohibited importation, unless such trade marks or representations are appropriately marked with the phrase "importe det (imported from) or "fabrique en" (manufactured in) and the country of origin or manufacture of the goods. The patent law of France is that of July 5, 1844, as amended. Under its provisions the inventor or his successor, whether a natural or juristic person is entitled to obtain a patent for a new and useful product or process. The term for which patents are granted is nominally for five, ten or twenty years. In practice, however, the term is usually twenty years. When an application for a patent is filed it is examined to determinethat it conforms with the requirements of the law but there is no examination to determine the novelty of the invention. To be novel the invention must not have received sufficient publicity either in France or abroad to enable one skilled in the art to put it into practice. By reason of a treaty between the United States and France a period of twelve months priority is granted in which the foregoing requirements of novelty will not apply. Patents are subject to annual taxes payable yearly in advance. These taxes are levied for the entire life of the patent. A period of grace from one to six months is allowed after the tax has become payable but a fine is imposed on the patentee. Under penalty of forfeiture of all the rights acquired by a patent, the patentee must meet the demand of the public for the product or process by manufacturing it in France within two years from the date of the signature of the patent. Manufacturing may not be discontinued for any two successive years. The term for manufacturing is extended to three years under the provisions of the above mentioned treaty between the United States and France. Unfair competition (concurrence ideloyale) is prohibited under French law and the remedies therefor are available through a civil suit instituted in the appropriate court by the injured party. Literary and artistic works are protected in France by complying with the requirements set forth in respective laws relating to this subject. Two copies of the work should be forwarded to the National Library at Paris accompanied by a declaration in duplicate which must be duly signed and indicate,

1) 2) 3)

4)
$) 6) 7) 8)

the the the the the for the the

title of the work; name of the author, printer, manufacturer or editor; date on which the production is placed on sale; price of the work; number to be issued; books, their dimensions in centimeters number of pages; date of the issue.

The applicant should request a receipt. The pirating of works or shipping or exporting pirated works is a misdemeanor and punishable in accordance with the provisions of the Penal Code. Literary and artistic works protected by copyright may be assigned or inherited. C. Effects of the War on Industry Reports indicate that Japanese industrial and commercial experts were on the heels of the Japanese forces which occupied Indochina progressively in 1940 and 1941, and took inventories of goods, factories and anything else of economic importance before setting to work to develop the country's economic potential for purposes of "Greater East Asia." Japanese control over large French companies extends to transfers of ownership, which may not take place without official consent, while transactions in stocks of companies over 200,000 piastres in value must be reported to the Governor-General. This regulation

presumably protects Japanese seeking to gain legal control from undue canpetition from outsiders. All available reports suggest that

Mitsui, Mitsubishi and a few other Japanese firms predominate in what little industrial development is taking place in Indochina, as they

also predominate in the country's trade. It is believed that the cement and alcohol industries have con-

tinued to operate at approximately full capacity since the outbreak of war. Possibly the match factories have also been fully occupied

- 29 -

although there is an equally strong chance that the Japanese have been unable to supply the quantity of chemicals previously imported for this industry from France. The cotton textile industry has al-

most certainly been forced to reduce operations drastically because of the shortage of materials. On the other hand, the cutting off of

the supply of jute from India has necessitated not merely the growing of jute and substitute products in Indochina, but also the processing of the same, and it is believed that thousands of spindles for spin-

ning jute and hemp have been sent or are scheduled to be sent from Japan. A carbide factory which the Japanese are reportedly setting

up has been discussed above. It was formerly thought that the Japanese would use the considerable mineral and agricultural resources of Indochina as a basis for war industry, thus saving the cost of transport in the supply of

troops in the southern regions and increasing the total economic potential of "Greater East Asia." For instance, it was considered

possible that special processes would be devised for smelting and fabricating Indochina's iron ore with local anthracite coal s perhaps mixed with local lignite or imported petroleum. There is no present

indication, however, that the total employment in Indochinese factories is any greater at the present time than at the time of Japanese occupation. This is in line with the reported Japanese plan for con-

centrating production in the "Inner Zone" of Japan, Korea, Manchuria and North China, It therefore, seems likely that the end of the war

will find very few factories in Indochina and unless the war is un-

-30

usually kind to that country a large proportion of the factories now existing will be damaged or destroyed. obvious tasks for those in One of the first and most of Indochina

charge of the economic life

immediately after the expulsion of the Japanese will be to restore to operation the power plants and such industrial establishments as the Haiphong cement works. Starting the production of cement will the country's greatest area re-

not merely give much needed employment in

of overpopulation, but will also provide materially for use in

building other factories as well as roads, railways and other public works.

-31

II.
A.

Commerce

Domestic Trade Domestic trade was divided between Chinese, Annamese and French.

The former did not have the near monopoly which they enjoyed in
Thailand. In fact, the Annamese appeared to have shown more ability

to compete with Chinese immigrants in commerce and industry than any of the other peoples of Southeast Asia. Several large French companies had imposing department stores in Saigon and the other leading cities but mot of the country's local trade passed through small shops and bazaars which were very numerous in the large cities and were found in large villages throughout the country. One of the most important retail centers in the country is the "Halles Centrales de Saigon" a large municipal bazaar, with hundreds of small stalls, open 11 hours per day, and visited by a total of 31,000 prospective customers daily. It is described in some detail

in the January 1939 issue of Bulletin economique de 1' Indochine. Similar bazaars are found in Pnom Penh and other cities of Indochina, as in Oriental cities generally. The Veterinary Department in Cochinchina seems to have functioned somewhat as a peacetime 0,?.A,, May 1939 Bulletin economique, according to a long article in the part of which reads, in translation, as

follows:

"The

Regional Veterinary Service has always occupied itself most actively with food economy - production, transport, consumption, prices, etc. The first devaluation (of franc an piastre) of 1936 only gave greater importance to these

- 32 economic questions. Since that time the Regional Veterinary Service, in cooperation with the Secretary of the Local Commission of Price Control, did not cease to follow every price fluctuation of bommodities considered of prime necessity. "The Local Commission of Price Control holds a plenary session each month. During the month the President and his S cretary, forming the permanent sub-committee, meet twice weekly to examine the claims presented by consumers, the requests for price increases made by merchants, and to prepare the agenda for the Central Commission. "The work constitutes what is commonly called the 'fight against the high cost of living.' It is a thankless task, requiring numerous enquiries. ....... This Commission's activities bear in particular on the Saigon Central Market which constitutes the great regulating market of southern Indochina, and the influence of its efforts extends beyond the confines of the market place. "The best method for combating high cost of living in a market is to permit a constant control of the current prices. Upon our proposal of October 2, 1936, the Governor of CochinChina provided for the posting of prices for foods of prime necessity. This.......aroused considerable opposition by the merchants, and during the course of 1938 we were compelled to deal with 211 infractions of this one rule. "The method of action of the Local Commission of Price Control is through a similar procedure. If the merchant has increased the price of his merchandise without speculative intentions, the Commission sends him a verbal notice, and if he attempts to act in a speculative manner a written notice is addressed him. Finally, if a merchant has already received a second notice his case is referred to the Court of Justice. "During 1938 the Local Commission of Price Control sent 93 verbal notices, 88 written notices, and 7 offense cases were brought before the tribunals. "This continued action, the permanent control of prices, has permitted us to follow the price fluctuations from day to day. It is of importance to note that during the course of 1938 the prices of certain foods were most irregular. The foods that were the most affected were rice and pork. "Rice.......rice has increased from 3.50 piastres per picul during January to 5.40 piastres the first of August and then it decreased to 3.60 on December 15, a wholesale price variation of 54 percent which was followed by a similar variation in retail prices.

33

"Pork:

The changes in price of pork is of great importance since pork constitutes some 85 percent of our total Considering that the price of pork fluctuslaughterings. ates with that of live hogs, we shall take as basis hogs on the hoof at 100 kg., delivered at the regional stockyard, This quotation is moreover that which appears in the Chamber of Commerce Bulletin and in all economic reports.

"At the start of the year the market price of 36.00 piastres rose to 37.50 at the suckling period (Feb. 1). The prices
then decreased, and after considerable fluctuation stood at 30 piastres on April 1, remaining below that price until August 15, excepting for two strong rises, on April 6 and May 11, when they returned to 32 piastres.

"We must stress the dangers which attend such fluctuations in price. Pork and rice constitute the basic Axmanite food. Consequently during this year, 1938, the prices of these essential products underwent a rise of 53 and 54 percent. These rises weigh heavily on the family budgets. The consumer is unable to meet them except by an increase in salary or a decrease in consumption.

" r......Without wishing to give all the credit to the Local Commission of Price Control we must, however, mention the variations of the price index for the cost of living between Saigon and Hanoi during the following recent years.

Table

II

"Variations in Cost of Living in Saigon and Hanoi

( 1925 = 100)
Saigon Hanoi

Quarter
3rd

Year
1936

iuropeans
117

Natives
80

Eureans
125

Natives
80

hth
1st 2nd 3rd

1936
1937 1937 1937

120
124 126 130

90
90 95l11ih 100

130
139 148 15 158

75
85

95
102

4th
1st 2nd 3rd

1937
1938 1938 1938

132 138

102
1.O5 108

l05
108 110

141
14.2

164
158

- 34 -

"We see that the index variation between European prices for September 1936 and October 1938 is 43 points at Hanoi and only 25 points at Saigon, while the variation for native livelihood is 40 at Hanoi against only 28 at Saigon. Finally, the curves of these variations are regular at Saigon while they show violent fluctuations at Hanoi." Perhaps the Saigon experiment was helpful in control regulations promulgated in chine Francaise of October 19, a long list the general price

the Journal Officiel de l'IndoMaximum prices were fixed for

1940.

of foods, fuels and other products used by the masses. foreign trade

The Japanese not merely took over practically all

as explained below, but they have also set up retail shops which have displaced established French merchants. Rationing of sugar and other

commodities was introduced, and rice producers were required to declare their holdings of rice and paddy, as a measure to prevent black markets. In spite of these measures (or because of the inflaother sectors of the

tionary measures introduced by the Japanese in economy) prices of the necessities of life

have more than doubled

since the Japanese occupied the country, while Tonkin has experienced near-fanine conditions, Hanoi bazaars. By 1943 merchants were required to declare stocks of all both vegetable and mineral, nine, oils, rice sometimes being unobtainable in the

together with dyes, cloth, leather, quiarms, jewellery, soap,

flour, guttapercha, milk, medicines, cigarettes, sulphur,

tires, matches,

acids, silk, rice and sugar.

The shortage of vegetable oils led to the transformation of the Franco-Asiatic Petroleum Company into a company for refining and dealing in fats and oils. Numerous reports indicate efforts to in.14

35 -

crease the production of oilseeds.

Meatless days and restrictions

on the use of electric power are features of Indochinese wartime living. A source believed to be reliable states that the cost of living index for Europeans increased from 135 (1925 = 100) at Hanoi in 1939 to 332 by the middle of 1943, the corresponding period showing an increase from 108 to 194 at Saigon. Hanoi increased from 118 to The index for laborers at

463

in

the same period, against an in-

crease from 110 to 225 at Saigon.

B.

Foreign Trade The pattern of Indochina's foreign trade differs little from

that of its Haiphong, I/

neighbors,

Burma and Thailand.

Two ports, Saigon and teakwood and a A

export rice, maize, rubber,

coal, iron,

considerable variety of other raw or semimanufactured materials. very long list of consumption goods are imported, headed by paper, dyes and drugs.

textiles, petroleum products and chemicals,

Produc-

tion goods imported include petroleum products, chemicals, metals and manufactures, machinery and tools, vehicles and vessels. In view

of Indochina's colonial status, laws and practices were such as to direct half of all foreign trade into French channels. This was ac-

complished not merely by tariff duties, which were frequently moderate in appearance, but also by quotas, permits and exchange control. reports of special cases of discrimination in

There are, moreover,

1/

Included with Haiphong are Hongay, coal-shipping centers.

Campha and Port Redon, nearby

-^'<s'

-36

favor of French firms and French. goods. which cannot be classified under any of the foregoing headings, but which were probably as ef-

fective in maintaining French predominance in the trade and economic life of the country. Indochina's relatively undeveloped state, plus its wide variety of crops and products, resulted in a lower per capita foreign trade than any of its neighbors with the exception of China. The follow-

ing table shows that Indochina had a lower per capita trade than any of its neighbors except India and China. Table III

Per Capita Foreign Trade in Southeast Asia, India and China (Annual Average - 1936-1939) Country British Malaya Burma J Netherlands Indies Thailand / Indochina India China 1, Balance of Payments: Imports Exports

U.S.63.0oo 5.60
i.0o

UvS475.5 . 12.65
6.70

3.55
2.60 1.60 .70

5.10
4.05
2.00 .ho

The Indochinese Government issued balThe

ance of payments statements only for the years 1934 to 1937.

International Economics and Statistics Unit of this Bureau has compiled the following abbreviated statement, on the basis of available League of Nations data:

1/ Calculations based on foreign trade and population figures from the Foreign Commerce Yearbook.

1/

Burma average for the fiscal

years 1936-1937 to 1939-190.

Thai average for

the fisca

l935-l936 to 1938-1939 inclusive.

37

Table
French Indochina:

IV

Balance of Payments

(In Millions of Francs) 1eceis 1934

Merchandise

1935 1331 20 290 81 295 102 2,119 901

1936

1937 2,611 24 335 95

130

1,063 exports Interest and dividends 17 defense 309 Expenditures on national 84 Other service items Longteerm capital items:200 New issues 182 Sale of securities Total 1,855
928

1,742
21 295 86 210, 2,354 976

346
3,541 1,562 863 200 82 39 106 23

Payments
Werchandise imports Interest and dividends Personal remittances Travelers' expenditures Misc, Treasury transactions Other service items Long--term capital items: Amortization Purchase of securities Total "Balancing"t
Net gold

533
176 75

503
162 83 117 52 22 30

662
169 85 103 121 22

140
122 21 29 2,024

49
2,187

49
2,924

1,870

items

movement

+62 +97

+30 -285 -14

-

+30 -183 - 14
-

+70
741

Net change in short-term capital

Residual

+10
+

+54
-

Total

169

2h19

167

617

Source:

League of Nations.

As French statistics, particularly those relating, to Indochina, are occasionally confusing and incomplete, the statement just cited

should be accepted as only an approximation of the true state of affairs. The excess of value of merchandise exports over merchan-

dise imports is no greater than that of other colonial areas which

- 38 -

are heavily indebted to the controlling power and which have large investments by foreign concerns. It will be noted that the item

"interest and dividends" averages about 60 percent of merchandise imports, while personal remittances, chiefly French and Chinese, are quite large. Also worthy of note are the items representing new

investments of foreigners in securities, industries, plantations and mines of Indochina. 2. General Trade Statistics: Indochinese trade statistics have

been compiled on an annual basis, for the year.ending December 31. Value figures for imports and exports during the present century are given below. The effect of the depression on Indochinese trade is

particularly striking when the values in francs are considered. 1/ The demand for Indochinese products as a result of the armaments race of 1936-1939 is evident. It will be noted that the Government

of Indochina embarked upon a development and armament program at the same time, and this probably had much to do with the increase in the franc value of imports.

1/

The further decline in the value of franc and piastre after 1937 was considerable. It accounts for the apparent permanence of the decline in Indochinese trade, from the standpoint of the gold dollar. Since America also had revalued the dollar in the meantime, the last two columns of Table V give a somewhat distorted picture of the situation.

- 39 -

Table V Value of Imports for Consumption and Exports

of

French Indochina Products

Yearly
average

Millions
I
tsmporos

of Francs
147.1

or year 1901-05 1906-10 1911-15.

1916-20

Thousands of Gold Dollars ports Eports

212.3 204.8 200.8

420.4

40,972
39,530 38,334

28,391

212.9 253.5
558.8

41,093
18,161 7,630 93,436 55,094 95,787 91,191 70,213 92,829 117,160 124,898 116,866
115,187

51628
70,653 45,318 60,257 68,828 66,486 72,762

1921-25 1913 1921 1922 1923, 1924 1925: 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938

1,181,9 234.8 807.7 839.4 1,093.5 1,388.6 1, 780,5 2,867.4 2,685.9 2,537.2 2,602,8

1,555.7 285.5 1,284.0 1,112.1 1,154.8 1,771.5 2,146.2

84,930
92,902 105,286

3,854.9
2,981.3 2,983',4 2,611.4 1,840.8
1,120.3

101851
102,030 70,953

1,810.0
1,290.8 967.9 910,8 914.3 901,4 974.7
1,562.4

5o,600
37,944 35,704 35,839

1,018.1 1,014.5 1,060.6 1,298.3 1,708.1

2,594.1

102,379 72,162 43,918 39,910

39,769
41,575
50,893

35,535
34,801

36,737
33,371

59,974
60,187

1,947.3

2,8143.8

48,363

1939

2,382.3

3,494.7

35,683

52,684

3. Trade in Principal Commodities:

Trade in the principal comIn spite

modities is set forth in the table on the following page.

of Indochinats fairly large textile industry the outstanding imports were cotton fabrics, of nually.

-which 8,000

to 10,000 tons were imported an-

Jute bags, raw cotton and silk ard rayon fabrics were also

imported in considerable quantities, and total imports of textiles and textile materials accounted for almost a third of total imports in 1939, Heavy iron and steel r
and metal and mea manufactures au and

-o

machinery were also important, particularly after the program of industrial and military development made itself felt.

Whereas Japan has supplied a considerable share of Thailand's textile imports with Great Britain second, of an average of 9,664 the

metric tons of cotton and other cloth imported by Indochina in years 1935 to 1939, plied by France.

inclusive, no less than 8,588 tons were sup-

Similarly, France supplied 37,682 metric tons out

of 47,218 tons of Indochina's iron and steel imports and 19,470 tons out of 23,304 tons of machinery and tools. Rice and rubber were outstanding among exports, about 60 percent of their total value. importance with rubber but in 1939 it accounting for

Maize was ordinarily of equal was exported in somewhat smalMineral exports,

ler quantity and the value figure dropped decidedly.

headed by coal and tin, were important, but ranked far behind the three leading exports.

0
40

24-6741OABCD

Table

VI

Qntit Coimodity Imports for consumption Milk, condensed Wheat flour Vegetables: Fresh Preserves Other Table 7riits Nuts, areca Tea Wine Tobacco Cigarettes Cotton, raw Silk, raw Cotton yarn and thread Cotton fabrics Jute bags Silk and rayon fabrics Other fabrics Llnit short 1000 tonas 1000 lbs. 1000 bbls. 1000 lbs.
a a N

Value

13
1433
7,.423 208 516 1482 10,281 272 28,3145 7,1426 11,569 13,952 6,o6o 1,271 2,192 3,609 5,170 22,770 1,554 4,198 17,800 578 10,005 285 30,2412 7,598 8,757 13 ,355 5,192 2,069 14,9214 4,328 30,720 1,773 4,388 21,072 67,996 2,271 1,831 1,029 31,995 25,118 3,236 177 58,922 1,027 732 1423 286 212 581

M(thousands of dollars)
62,201 1,237 56,502 859 1,1149 3140 336 255 239 147 154 1426 1415 14614 358 1014 262 1,017 929 1441 323 721 769 2,6114 2,293 1,281 1,1459 1,105 979 7,124 7,268 3,1445 1,873 2,015 2,915 869 1408 66 1,1412 1,1436 782 877 1,298 1,251 992 9144
300

6o,16

9,895
2114 35.011 9,572 12,310 19,158 6,180 1,587 2,203 3,583 13,550 1,604

957
376 329

33,434

gals. 1000 lbs. 100

a N U N U N N N

Clothing,

lingerie

Teakwood Paper Rubber tires and tubes Gasoline Kerosene Gas and fuiel oil Lubricating and heavy oils Iron and steel, heavy: Bars Other kinds Tin, pure Metal manufactures Other metals Machir ery Automc, Ales Automobile 2a rts Cycles and parts Chemicals, fertilizers Paints, varnishes Medicinal plants Medicines, prepared Other merchandise Bullion and coin 2-11519

tons 1000 lbs.

N

1000 bble.
a N

7,51b 12,9314 19,158 5,1409 1,4145 2,189 1,161 3,210 17,1493 1,561 1,1472 16,599 66,1014 1,1409 1,014 1,775 10,159 20,053 2,288 2514 306 102

537

568

3146 1,361
125 1,0141 2,114 1,362 500

365
1,187 275 835 2,108 1,808 857 8,190 2,34.. 3,1438 910 988 2,011 758 1,1438 1,2141 210 213 1,114 2,188 1,589

16,645
56,764 2,601

3,009

8,061
2,7147 2,0140

416,564
2,955 1,055

3.223
1,857 32,169 27,1439 2,581 276 311 120 4,938 21,850 31,394 6,352 22,208 8,002 4,751 2,162 326 859 46,226 5,514

698
1473
1,1482 803 1,876 1,574 256 293 9142 1,1405 1,889 2,550 58 2,574 1,7142 471 14514 1,1479 791 606 807
10,657

926
24,14141 21,808 2,866 309 160 14,5914 18,666 27,920 6,011 12,565

7714

tons tons
N

4,939
17,010 18,766 4,991 12,628 7,718 4,153 1,891 278 585 21,622 4,727 5,760

7,363
22,690

218 918 1,891 2,294 2,596 3,636 1,635 303 550 1,4014 1494 720 9,9146 1,783

336 375

39,564
14,6141 23,119

1000 libs. tons 1000 albs. tons number tons

I, I,

1,088 2,572 1,353

3,1435
592 2,905 1,607 331 551 1,915 752

4,979
6,788 2,301

5,1479
8,361 2,627

2,5614
4,071 1,8457 1,690.

3149 933
29,090

609
1,0142 43,229

1000 lbs.
N N

14,4714
6,013 906
-

5,916
7,1410 1,009
---

797
--

7,787
927
---

666 619

696
9,845 1,856

555

8147 10,597 1,243

Table

VII.
1939 1936 1937 1938

EXPORTS OF PRINCIPAL COMMODITIES

Commodity

Unit

1938

1939

EXPORTS OF PRINCIPAL COMMODITIES

Qyiant itr
Commodity

Value

unit short 1000 tons 1000 lbs.

U

i23Q
14,405 4,287

1938

(thousands of dollars)
3,932 4,619 19,1437 78,845 17,703 3,731 101,544 101,904 81,885 608 2,317 14, 737 29,366
268

2399
89,200 887 2,168 8,801

Exports of domestic products Eggs in shell Fish and shell fish Corn Rice Cassava Tea Cinnamon Pepper Hides and skins Kapok, clean Textile fabrids Teakwood Rubber Coal Cement Tungsten ore Tin ore Tin, crude Copra Vegetable oils, fired Oil of badiani Lacquer Other me Gold bullion
Silver coin

7,667
60,826
18,1413

10,388

1000 bu. million lbs. 1000 lbs.

* -

73,186 22,633 26,739 4,371

2, 9114
3,1411

16 ,624 77,9953
21,913

3145 3,667
17,1483 145,14114 814

2,839
18,329 142,968 1421

1458

3,887 5,590
2,879

2,3147
18,1453

35,373
142

*
* * *

3,133
8,601 6,729 1,986

14,3414 2,506
12,171 5,o22.2 8,307 2,688 10,852
127,

8,1493
8,337

10,112

3,283 5,394 3,575 14,9145 6,609

3,068

5149 353
698

6148
257

623

6so
294

2146
1492

1477
862

1496
383 501

6,944 2,757
11,0414

1426 6143 14, 526

14,731 5140

597 7314.
368

629
621

636

tons
1Q00 lbs. 1000 tons

11,365
91,083 1,692

1000 bbls. tons 1000 lbs. "

* *

147
21403

99,511 1,512 73
1490 2,590 5,036 214,524

919

1,553
2,632 5,110 23,115

13,036 151,854 1,754 9214

18,290

3,1467
23,5147
2,1492

14514 2,186 14,2147 6,992

1490 3,1496

5614
210 1,088 1,1415 583 162

3,1499
185 1,188
1,335

233 17,873 3,526 738 1,158

277 24,393 3,887 289 1,020 1,320 1421

939

346 954 1493 379

22,1147

5,117

220
4,261

1466

3,78

6,1417 5514 3,766

7149 397 1407 5,614

3,913

6,769
1,609 2,404

532

79

332 362. 5,068

445 256
278
5,1414 300 10

825

g6$

2-11519

Complete and authoritative figures for the years since 1939 are not available. It will be noted that the tables cover the period of trade caused by the foreign

up to the beginning of great dislocations cutting off of Indochina trade took place, from France,

with whom half of all

and the occupation by the Japanese,

commencing in

September 1940, with consequent shipment of goods to Japan under political and military pressure. Furthermore, the currency of Indovalue with the infla-

china came to have a more and more artificial

tion caused by the practical operation of the Japan-Indochina Comrrrcial Agreement. ed with caution. Hence subsequent value figures must be accept-

/
from

Fairly complete quantity figures are available for 1940, consular reports, and are reproduced herewith:

Table VII Principal Indochinese Imports and Imports Automobiles and parts
Chemicals Cotton (raw ginned)

Exports

in

1940

Millions

Metric Tons 2,292 4o,,37

11,641

of Francs
57.6 86.1 123.1

Flour, wheat
Ircn and steel

18,699
46,055

41.9
143.3

Machinery and parts Metal goods, others

Medicine, prepared Paper, paper products

3,987 14, 767

360 10,526

106.9 75.9
33.6 100.1

Petroleum products, liquid

Rubber goods Textile fabrics Tobacco and products

121,471
1,328 26,260 2,713

168.3 35.9
338.1 39.1

Wine
Yarn, thread, cordage Milk, canned

6,808
2,836

30.8
85.7

4,421

52.0

(continued)

Value figures for the period prior to 1939 were also subject to explanation. The gold dollar values given in the preceding pages were based on the old par before 1914, on the new par between 1926 and 1932, and on League of Nations calculations of deviations from parity for the years 1914-1925 and 1933-1939. Mention has been made of the drastic decline in gold value of the piastre

Principal Indochinese Imports and Eorts in 1940 (continued) Thousands of Mtric Tons Millions

Eports Animals, live

Cement Cinnamon

of Francs
12.2
30.5 13.4

5.7
126.3 1.6

Coal, including coke Copra

Eggs, egg products Fish, (dried, salted, smoked)

1,566.4 *h 15.1
34.3 1.1
275.7

160.3. .8
28.7 71.1

Kapok
Maize

5.0
191.5

Pepper Rice Rubber Skins, raw Tea

Textile fabrics Tin (blocks, slabs, ore)

3.1 1,603,0 64.9 2.1 2.5

.8 5.2

42.4

1,815.0

1,086.6
16.8 31.2
17.2 143.4

Teakwood
Woodwork and furniture

7.4
8.4

11.1
12.5

Export figures for the period since Japanese occupation are difficult to secure, and naturally it is impossible to find reliable

figures for the period since the outbreak of war in

the Pacific.

How-

ever, the following figures from a source which may be reliable, compared exports during the first eight months of 19h2 with corresponding

totals for 19h1.

Table IX

Indochinese Exports under Japanese Occupation (Quantities in Metric Tons January Exports White pepper
Black pepper Tea Coffee White rice Unhulled rice Paddy Broken rice
-

August

1941
771
1,358 951 335 698,698 32,278 1,7hh 96 21h 22,7 1

194h2
106
2,142

18s
724,69)4 36,227 d,868 25034

Rice Flour

14,594

I""

45

1.

Trade with Principal

Count

Meritn has been made of This

the fact that half of Indochina's trade was with France, fact represents a triumph of political control over neighboring Thailand, with a similar economy,

geography, for

traded chiefly with

neighboring countries and with Japan, which stood first in Thailand's imports. In view of Great Britain's" very limited success in meeting

Japanese competition in the textile trade of India and other Asiatic possessions, it is interesting to note the comparative shares,

particularly in the import trade, of France and Japan as shown in the following table::/

Commerce Yearbook, op. cit.

~C~p~Pura

Table Z
TRAC WITH

PRINCIPAL COUNTUI

(Thousands of Dollars) Impits for Consumption 193 domestic

ixots
81,555 7,179 1,168 1470 1,091 923 1, 712 2,180 59,200

Country of origin or destination Total

1936
55,922
1,1417
1

12.

62,201
2,071
N

56,502
2,8140
-

60,4116
2,520
-

101,544

101,904 7,075 1,5114

United States
Cyube Belgium France Germany Netherlands United Kingdom China Hong Kong
India

6,365
127 508

10, 673 961

605 31,1459 297 219 1,1451

997 33,656 55 294 1,330

5,1455

4,566
5,507
1,5148 2,016 2,952 142

.19766
2,094 3,521 8
2,353:

4,331

671 717 29,536 33,523 15 9 530170 1,811 1,705 41,1419 2,695 4,223 1,162
1,608 1,611 2,454 3,-051 1,017 2,651

56,073
1,1410 771

958 46,897
2,55
559 1,349

1,205

3,037

8514

5,659

5,1498
11,502 170

7,596
151 2,522 511

1,777

3,3145 14,364. 7,967 6,69114 ,132.

Japan Netherlands Indies Philippines Singapore Thailand French Colonies: Algeria India (French) Reunion T~uisia Other Other Countries Ship stores For orders Percent of total: United States France Germany Hong Kong Japan Netherlands Indies French Colonies 2-11519

514

63
2,5149

14,655 506
1,723

14,265
504

962
1,935 9,131

314 7'466 6145

5

577
1,423 137

2,311
1,319
1,236

1,677
1,0145 1,1145 9414

6,11.72

-909 1,25

1,0147

364 694
214
1,125

360
239

1,104

1465
1 26 11 1,21.

~
1 51 15

661
10 115 75 1,512

76
1,109 1941 2,739

95
62
1,626

96
14,1146
.1,7142 130

695
827 2,113 1,1451 195 1,771

994

14,273 1,9141 102

-

2,631
7.1

2661 1426
12.1

2.14

53.14 .5 7.3 3.6 6.0

3.1

53.6
.8 8.5

3.3

5.0 52.3 .9 7.14 2.9 14.3

14.0

14.2

6.3
5.5

56.0 .7
7.0

.1.7 14.14

14.6 .5

3.41

3.3

6.1

4714 2.6 11.6 14.3 .5

49.0 1.14

32.5

.5
8.9

9.9
3.2 1.0

.4.7
1.1

6.1

5.9

14.9

47

The length of the voyage between France and Indochina largely explains the fact that imports from France continued at the customary level whereas exports to France declined sharply. Most of the

goods arriving from France during the last four months of 1939, while the war in Europe was going on, had left France before September 1, 1939, or had at least been contracted for and perhaps On the other hand, it was easy to postpone

delivered to the docks.

or cancel shipment of goods to France from Indochina immediately on the outbreak of war in Europe. Trade with Hong Kong and the Netherlands Indies was partially entrepot trade, and in the case of the former some of the trade was actually with the United States.

Indochina's Trade with the United States:

A wide variety

of goods was

imported from the United States, but it was only in

imports of petroleum products and certain types of machinery that this country figured largely in Indochinese import trade. American

imports of crude rubber were increasing considerably prior to the outbreak of war, and this commodity accounted for all but a small
part, in value, of America's total purchases from that country. tails are as follows: De-

Table I 'ADE WITH THE UNITED STATES NY PRINCIPAL Comoit Unit

COMMODITIES
va2lue

1231
Imports for consumption tons from United States Fish and shellfish Vegetables, canned Fruits and nuts Jams, confectionery Cigarettes Cotton, raw 1000 lbs.
N N N N N e

1938 25,697 219 203 1450 168 15 12,708 52

30,881

iai6
280099 313 222 215

M1232
2,071

U 193 12
2,8140 2,520

(thousands of dollars) 25,789 128 185 272 251 15 10 21,921 31,555

5,417 21,2149

1,14.17
9 1620 26 13 118

297 211 172 186 2,890 38 24,836 35,4138 9,1459 2,069

Manufactures ~Gasoline
Rubber

9147

914
51 14,817

141
30,227 38,2140 12,700 3,219

17 17 114 18 41 361 132 21

15 18 17 15 1,321 214 130 86 50 91 1141 136 2241

314

28 19 15 10

147
481 21 110 11m

barrels
n It

162
189 15 131 92 224 105

Kerosene Gas and fuel oil Lubricating & heavy oil Road oils, asphalt Metals
Metal

tons
It

1,838

N I. N.

7,335

4,537
2,1451 873 255 398 9,700

Manufactures

656
186 2814 1,764

31

Machinery Automobiles &parts Essential oils All other

number
pounds

26,987 18,791 1,941 5911 992 1438 222 1425 12,787

95
271 202 286 293 25

3 16
12 19 282 296 19

5,9314 3,668 797.

380 390 9259

39

93

3145 33

92

165

Exports

of French

Indochina products United State Hides and skins Pepper Wooden boxes Rubber, orwie Coal Tin, crude Niax vomica Oil of bodian

tons
1000
N U

19,374 lbs.

18,512
125 851 2,119 35,1418 1,202

29,012

42,531
200

6,368
11

7,075
214

7,179.
122

10,673 11

56

62 3,162
2,754

2,155 37,100 tons 5141 1000 lbs. 1,010 1,544 N

46, 161
5,118 7811 1214 90

663,3147 64,778 1,1499 33

135

1,286

5,816 3 4 149

52

147 314
320
25 22

85 6,729
22 1148

3 35
10,3143

146 26
28 181

57

All

other

144 214

2-11519

- 49 6. Limitations of Foreign Trade Statistics: In view of the

fact that most of Indochina's trade took place through two outstanding ports, and that similarity of economies prevented trade with it is likely that foreign

Thailand from being particularly important,

trade statistics, as officially compiled, were reasonably accurate. It is probable that some smuggling took place across the frontier and regarding the period since the

with China, even in normal times, outbreak of war in operating in the Pacific,

a senior employee of an oil company

Indochina has commented as follows regarding the situa-

tion up to the middle of 1942: "A certain amount of business is done from Lunchow with Indochina; merchants frequently cross the river. A good It is organized on simideal of smuggling is going on. lar lines to those operating in the West River Delta. There are practically no Japanese troops stationed along the Indochina border. This border is entirely policed with French Colonial troops.. Imports (into China) are chiefly piece goods, medicine and soap but it is possible to get kerosene and gasoline in, and small lots of 20 to 30 tins at a time are brought in and sold at approximately CN$500.OOOand CN$100.000 a tin respectively......." Textiles, medicines, cosmetics and miscellaneous luxury goods

which combine high value with small bulk were reportedly reaching Free China from Indochina in large quantities at the end of 1912,

wolfram and mercury being sent back to the Japanese-controlled areas in exchange. It is reliably reported from several sources that the

inability of normally-honest civilian officials and military officers to support themselves otherwise has caused this trade to continue and even expand throughout the whole of 1943. situation is blamed by most observers. It The present inflationary is therefore impossible to

get more than a general idea of the wartime volume of Indochinese trade, since even the Japanese authorities are unlikely to have an trade carried out in an ostensibly

exact tabulation of the quanr

illa

rl

mannar_

7.

Export Subsidies and Dual Price Systems:

Export subsidies

in Indochina were adopted for several commodities during the depression, the basic law for this and several other French colonies being dated March 31, 1931. Rubber, coffee, sisal, manioc, castor

seeds and oil, sesame seeds and oil, bananas, tapioca and arrowroot were the commodities for vwhose export subsidies were paid at various times, but chiefly in the years 1931-1936.

Consul Roberts of Saigon

j/

reported that:

"Briefly the laws establish a special fund for the proIt is according tection of French Colonial products. to the original legislation, made up of funds appropriated by the colonies, and special import taxes levied in France on competing foreign products and earmarked for bounty funds in the colonies." The wording of the laws relating to the amount of subsidies was often the same as that in of Article 5 reading: "These bounties will be determined quarterly by the difference between the cost of production, which will be fixed by proclamation of the chief of the colony and approved by the Minister of Colonies, and the average price of rubber for the quarter, provided the amount shall not be more than three francs per kilogram. the original law relating to rubber, part

"The payment of the bounty will be discontinued when the average price for the quarter shall reach the level of the cost of production." By March 31, 193h, the price of rubber equaled the cost of pro-

duction as officially calculated in Indochina, and subsidies were discontinued..

I/

Export Bounties in

French Indochina, dated Saigon, May 26, 193h.

- 51 -

Consul Roberts reported further that: "Special import taxes are established in France for foreign coffees and sisal, revenue from which is set aside for the protection of French Colonial coffees and sisal..... A French law dated March 31, 1931.... arranged for an export bounty (on tapioca, arrowroot and manioc) to bring the return to the producer up to the cost of production. No legislation or proclamation fixing the anount of the bounty has been promulgated in French Indochina as exports are negligible." 1/ The consulate reported that the bounty on coffee for the third quarter of 1937 was francs 0.90 and 0.50 kilogram, depending on quality. In the case of castor beans and oil and sesame seed and oil the proclamation providing for a subsidy was dated January 16, 1936, providing for francs 0.15 and 0.20 subsidy per kilogram for sesame seed and castor bean export, respectively, and one franc per kilogram for export of either kind of oil. tinued on Jc4y 1, 1937. 2/ The subsidy on bananas was based on a law of April 1932, promulgated February 8, 1938, and was discontinued by a decree dated This subsidy was discon-

April h, 19O0.
So far as is known, the bounty on sisal was continued at least

until Japanese occupation of the country rendered it meaningless. A decree of April 18, 1940, by President Lebrun, provided rather
for a growing subsidy, and reads in
1 Idem.

translation:

SConsular report "Bounties on certain Seed and Oil Products Shipped from French Indochina," dated Feb. 3, 1936, and clipping from the official journal, containing the decree dated Dalat, June 26, 1937.

-52

"Loans, without interest, of 1,500 francs per hectare may be granted to growers of sisal for increasing the cultivation of sisal. "The payment of these loans to growers shall be effected at the rate of:

1,000

francs the first year 250 francs the second year 250 francs the third year."

On the other hand, the May 6, 1941 Trade Agreement between Japan and Indochina contained measures which resulted in a dual price system, although no such system is believed to have existed prior to that date in Indochina. The Japanese were to purchase

700,000 tons of rice, plus the unused portion of the French quota of 320,000 tons, and the Indochinese Government was responsible for the execution of the plans, "The price of the rice to be shipped to Japan, as fixed in the agreement is to be 12.20 piastres per 100 kilograms, including exiport duties, compared with an average of l418 and 13.15 piastres during the final quarter and the entire year of 1940, respectively." (Foreign Commerce Weekly,. November 25, 1911, page 5.) This agreement, and the ones which have supplemented it since

that date, further provided for a clearing arrangement, whereby the Bank of Indochina and the Government would make available to the Japanese sufficient piastres to pay for their purchases in Indochina, while a similar arrangement prevailed in Japan for Japanese sales to Indochina. Eventually practically all of Indochina's

exparts were included in this system, and Japan has fallen far behind in shipments to Indochina. In other words, a considerable pro-

portion, perhaps half, of the goods shipped by Indochina to Japan,, and really paid for by the Government of Indochina, are not paid for

53

by the Japanese in any way,

except in blocked yen.

The final re-

suit has much in common,with a subsidy, and also with a dual price system, and is so important as to dominate the country's economy. Broadcasts from Saigon in Annamite suggest that the Government has to resort to propaganda axd sometimes to financial inducement to persuade reluctant peasants to part with their produce for sale to Japan. 8.

Wartime

Changes in Indochinese Trade:

Exports, imports and

exchange restrictions were adopted soon after the outbreak of war in Europe. Import control involved quotas and import permits. Trade

was accordingly hampered but some exceptions to the rules were made.

By the end of 1939 it seemed that goods would be imported only from
France and its colonies except for commodities considered essential. The American Consulate summarized import and export restrictions as

follows:
a)

Imports A decree of February 2, 1941, established a Yedeati on of Indochinese Importers composed of ten import associations grouping all authorized importers according to the classifications of products imported by each. These associations are required to inform the Government General through the Federation regarding their respective requirements and, on the basis of their requests, the Director of Economic Services issues a global license to each association quarterly for reallotment among its members by agreement or in proportion to their respective imports of a particular product during the years 1937, 1938 and 1939. Requests for specific import permits must then be approved and countersigned by the president of the association concerned...........
rx orts - A decree- of February 10, 1941, established a bber Sales Bureau to which rubber producers must deliver all their sheet rubber........ Producers are responsible for the quality of their rubber up to the

b)

Kingsley W. Hamilton, Quarterl~cn 1 1941, dated Saigon, June

:", view, First Quarter,

-54 time of full purchase by a buyer, but they have no rights or responsibilities in connection with the sale. Sales are completely in the hands of the Bureau which pays the producers at a uniform rate..... With regard to rice, the entire market was also placed under Government supervision by a decree of February 2, 1941........ The conservation of foreign exchange was an obvious aim of many of these decrees. It is more difficult to understand the reason for

export regulations with regard to such commodities as rice and maize unless it point. is assumed that Japanese influence was dominant at this 15.6 and

Imports, exports and total trade declined 22.7,

16.4 percent respectively comparing 1940 with 1939. titative figures,

These are quan-

the piastre value of exports having increased due The outstanding

to wartime prices for many Indochinese exports. change in 1940 was the increase in

Japanese purchases of rice from

7,600 to 473,000 tons. Japan's share of total exports increased from 4.4 percent to 20,6 percent while France which formerly purchased half Indochina's exports took but 17.6 percent in 1940. Exports for the first half

of 1941 reflected the Japan-Indochina Trade Agreement, took 45.4 percent of all exports and in

for Japan then

the months April to June inThere being no cor-

clusive Japan's share increased to 63.2 percent. responding increase in in

Japan's exports to Indochina there piled up

Japan great quantities of unused balances due the latter country. On May 6, 1911, soon after Japanese mediation of the Thai-Indo-

china War, the Japan-Indochina Trade Agreement was signed providing for increased exports to Japan of rice, rnhber, maize, coal and ores.

55-

Japan in return was to supply 6S different types of goods on a quota basis, while 10 other goods were to be imported if, as and when it Vice Consul Hamilton reports 1/ that there

was feasible to do so.

were imports from Japan in only 22 of the 6S classifications during 1938 and 1939, and in only 25 classifications in 19h0, so the

treaty seemed to include genuine concessions in favor of Indochina, particularly in view of the unused credits piling up in Japan. sequent reports indicate that the credits have piled up more and more, and that Japanese imports show no sign of balancing exports to Japan. Another economic pact was signed in July 1942, and Tokyo broadcast the information that large quantities of Japanese goods were being sent to Indochina. Japanese socks, underwear, neckwear, stockSub-

ings, cotton goods,toothpaste, toothbrushes and cameras were said to be on sale in shops of the large cities. On September 23, 1942, Tokyo announced the conclusion of a barter agreement between North China, Indochina and Thailand. It was

also announced that membership in the Indochina Commercial Association was compulsory, after October 10, 19h2, for all who engaged in
comerce. Next, Tokyo announced the signature of a third Japan-Indochinese

economic pact, early this year, which dealt with the export of rice and maize. It was not disclosed in what particulars the previous

agreements were unsatisfactory to the Japanese, but negotiations had been carried on between Governor General Decoux land Ambassador Yoshizawa and Secretary General Kuriyama, so they appear to have been Second Quarterly Report

important from the Japanese viewpoint.

In August 1943,

there was

signed an agreement which presumably concerned the carrying out in the immediate future of the basic 1941 trade agreement, and re-

portedly provided for further industrialization of Indochina. The Bank of Indochina is, in effect, forced to subsidize the

export to Japan of goods with a much greater total value than the imports of the country. The Japanese receive "credits" with which and hence

the surplus rice and other commodities are purchased,

the total of currency and credit increases apace, with no corresponding increase in goods. The balance due Indochina is impounded in a

special account in

Japan --

a system well known previously through Doubtless this situation is prices which was

the use of "blocked marks" by Germany.

the chief cause of the inflationary increases in very marked by the end of 1913.

9,

Indochinese Wartime Imports:

The amount and character of

Indochina's wartime imports are matters almost wholly within Japan's control. Textiles, petroleum products and possibly drugs were the

only imports which entered the living standard of the average Indochinese. Textile manufacturing capacity in Indochina can cope with

the minimum needs, essary,

but considerable imports of raw cotton may be necKerosene lamps may give way the country's history.

from Japanese-controlled areas.

to vegetable oil lamps which preceded them in

Probably few Indochinese would strenuously object to returning to the herbs and drugs of their ancestors. Development of Indochina's con-

siderable economic warfare potential, however, would entail large imports of railway equipment, mining achinery, chemicals and

57 -

machinery of many kinds.

Indochina's geographic position makes deThat country's resources in rubber and a

velopment of transport highly necessary. coal, iron, zinc, tin, phosphates,

forest products,

great variety of other mineral and vegetable products invite further development of extraction, if most certain that a country in not of manufacturing. It is thus al-

Japan's position would wish to carry

forward a large program of exploitation and industrialization..... A source believed to be reliable, estimates imports into IndoSeptember 19h2, as

china from other parts of "Greater East Asia" in

amounting to 1,210 metric tons, made up of textiles, paper, machinery, metal goods, rubber goods, thread, chemical dyestuffs, medicines,

iron and steel, refined sugar and raw hides.

The quantity, 1,210 tons,

represents but 32 percent of October 1938 imports of 34,583 tons. If there were not other and much more important imports, not included in the 1,210-ton figure, it is evident that Japan is It is unable to make much that were

use of the rich Indochinese resources.

possible, however,

imports by the Japanese army, including railway equipment, etc., not included in the figure cited above....

France was the source of most of the commodities just listed, and if It former import levels are maintained Japan must assume new burdens. is unlikely that very drastic reduction in imports of consumption

goods would result in marked difficulties for the Japanese authorities in their program in Indochina. The machinery problem is some-

what complicated by the necessity of furnishing Japanese-made parts and repairs for machines made in France.

- 58 -

Finally, it ported in

appears that the quantity of production goods im-

19h3 by Indochina will depend more on Japan's machinery

and railway equipment industries (and upon ocean transport) than upon conditions and developments in Indochina.

# #

59

BIBLIOGRAPHY
Arican Consulate

Numerous reports, including

Saigon:

"Cotton and Cotton Mearfacture in

French Indochina,"- "Export Bounties in French Indochina," and "Bounties on Certain Seed and Oil Products Shipped from Indochina." Annals of the American Acadeunr of Political and Social Science, March, 19k3. Annuaire Statistique de. l'Indochine, 1936-1937. Bulletin Economique de 1' Indochine (bi-monthly).
Bureau of and Domestic Commerce: Foreign Commerce Yearbook, 1936, 1939.

Foreign

Preliminary Survey of the Economy of French Indochina, June 2, 19IL3. (Confidential) F~les of the Far Eastern Unit. Ennis, T. E., - French Policy and Development in Indochina.

Eposition Coloniale Internationale, Paris, 1931, (Many specialized

studies). Far Eastern Review (annual). Gourou, Pierre, Gourdon, Henri
-Lee

Peysans du Delta Tonkinois 1931.

-L'Indochine,

Grandel, Auguste - Le developpenment economique de 1' Indochine francaise," 1936. Kelly's Directory of Merchants, Manufactures, and Shippers of the World, 1937, Volume I. Robequain, Charles - L'Evolution Economique de l'Indochine. (American edition scheduled for April 19I4h). Shepherd, Jack
tion de
-

Industry in Southeast Asia. L' Industrializa--

Societe D'Etudes et D' Informations Economiques :

1'Indochine.

Thompson, Vrginia

French Indochina.
ber, 19i3.. (Confidential).

United States Tariff Commission: n 4 i Industry in

Fech

G UL F OF TO0 N K/ N

Bangkoko

G UL F OF SI/ A

INDUSTRIAL MAP OF FRENCH INDO CHINA

8u-Button. Cb-CarbId. Cf-Co0cnt fibre Ch-Ch eoOI C,-Ceramic' 0.-Cotn *pIlnIn5 Cf-Oortrldg,
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PoPorcelin Pt -Pot.r R - Rubber Sg-Rog. I-Silk So-Soap - Tobaco

J - dute M- Match Me-Machl,. C0-0 CI 0p-Opium P- Paper

0IetIIIer. E-Epoive.

Pg-Ph o,0groph Records WI,.I... WPh-Phosphate