Exchange Closed

At the Osaka and Kobe cotton mills of the great Kanegafuchi Company, directors told workers' delegates last week that they must accept a 20% wage cut because of the falling price of cotton goods. "Why is it then," asked a blunt workers' delegate, "that you continue to pay 35% dividends? Why have you just voted your chairman, Mr. Sanji Muto, a bonus of 3,600,000 yen [$1,800,000]?"

While directors were trying to think of an answer 5,000 workmen walked out-- the first strike in the company's history. At 12 p. m. the Tokyo Stock Exchange suspended trading.

Should either the London or New York stock exchanges suspend trading, every country in the world would be affected. In Japan it is different. The Tokyo Exchange has closed several times in periods of depression. It is customary for Japanese boards to suspend trading on any day when more than 200,000 shares are sold, because of lack of facilities. The stock exchange in Osaka kept open without incident last week, and since no U. S. stocks are traded on the Tokyo exchange, the chief U. S. reaction to Tokyo's closing was a drop of .6-c- in the value of the yen at New York.

More than the cotton strikes at Osaka and Kobe was at the back of last week's exchange closing. Within the past two years the value of shares listed on the Tokyo Stock Exchange has fallen 30%. The removal of the embargo on gold shipments out of Japan has seriously depleted the country's gold reserve. Decreased U. S. demand for raw silk has brought a slump to Japan's chief export industry. Last week's cotton strike, and a hint of further labor troubles, brought Japanese brokers to panic's edge. Deeply concerned was the cabinet of Prime Minister Yuko Hamaguchi. A Tokyo correspondent quoted the opinion of several cabinet members that "the present condition of the market is due to manipulation in which the political opposition was concerned."

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