From the article of 'Petrel'
No.656 / November 30, 1997

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A large securities firm has also failed into bankruptcy finally.

The problem is not the manager's "Fault."
The postponed contradiction has revealed all at once.


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The failure of the Yamaichi Securities that occupies a place of "the four big securities" was clarified this time after the Sanyo Securities collapses and the Takushoku Bank go bankrupt for the first time as a commercial bank. The basis of capitalism swung and it came an age even the big enterprise that is listed to the first Tokyo Stock Exchange also cannot be idle. The influence of the bankruptcy of the big enterprise will be large and the major earthquake will reach to the related company. And, the 10 thousands of workers in relating only to the Yamaichi Securities lose the employment and are turned adrift again.
The nation and the government were stunned at the progressing situation and seem not to know the way to do. They expressed the administrative reformation and have talked there would not be the future of Japan if they would not carry out the financial rebuilding, and although even they do not start the problem, the situation is already about to fail.
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The failure of the large securities firm following to the commercial bank might be a situation not amusing at all even if we exactly said, "Financial panic." We emphasize that the one brought such failure is the peculiar contradiction of capitalism and it is not the "Fault" of the individual company nor only the responsibility of a part of manager who are immoral, imprudent either.

In fact, though the crisis of Japanese capitalism has actualized as soon as entering 1990's; However I wonder whether the bubble in 1980's also would already have exposed neither the explosion nor the crisis of the contradiction of capitalism.

Actually, the bubble in 1980's is the appearance of the capitalistic crisis and 1990's is only the extension.

And, the Japanese capitalism has been fighting hard the fierce battle pouring money named hundreds of trillion yen into "public business" or surpassing completely by the "super-low interest rate" of 1% or less to evade the panic after the bubble as soon as rushing into 1990's. And, such a demand expansion plan and a low interest rate policy were to have brought a powerful recovery of business generally.

However, such a "traditional" way all exposed powerlessness and had made the economic recession prolonged. The stagnation and the difficulty of economy does not only continue but also even deepens further though it is also approaching to the end of 1990's already. The finance has failed and the banking has become galley-west, too. Such a serious and long recession has already equaled it in 1930's.

The Japanese capitalism had neither the determination nor the courage by which to eliminate thoroughly the cause that brought the recession. They had only temporized glossing over by some occasional and superficial plans.

Therefore, the contradiction and the difficulty for the Japanese capitalism have all been kept. We have been not able to compliment that they worked seriously even as for the "processing" of bad debt one. The expectation of the Japanese monopolistic capital was that the stock prices and the price of land rose suddenly again like the bubble age , and thus it canceled all the difficulties including the bad debt. When this dream bursted, they were able to do nothing but failed.

The basis of the bubble, that is, the excessive production and the credit expansion was not canceled and the crisis of the Japanese capitalism has deepened further. It was the Japanese bourgeoisie that frightened any "reduction" and has been carrying over it, although it has been said that the elimination of the contradiction accumulated in the bubble age and the "reduction" were necessary. There is not any mystery even if the state would deteriorate further in the sequences, and would arrive finally at the situation, "Become a slave of illness."

If we bring the "responsibility" into a problem, it is all in the monopolistic capital and the government occupied with the petty tricks of clever-handed from beginning to end. They awoke the crisis and got alarmed as the administrative reformation and the finance big-bang, but it was too late.

The failure of the Yamaichi Securities is never the failure of one enterprise.

You the bourgeois talk and pretend whether the contradiction of capitalistic production is quite irrelevant with laying the "crime" only on one enterprise.

For instance, they are talking briskly the Yamaichi's failure was from that "Market" has become not to confide Yamaichi because of the severe eyes to the management of false such as "Flight" and lies, the cause of Yamaichi's failure is not the "debt excess" but the enormous amount of ex-book debt of 260 billions yen.

The character named Shuuhei Takeuchi in the economy part of the Asahi News Paper "explains" as follows.

"As the reason that the Yamaichi Securities was driven into the application of self close-down, the side that it had to pay at a stretch the debt of continuing the nebulous management is large besides the direct factor of the deterioration of financing and the fall of stock prices.

The betrayal act of the successive managers who had continued not to admit the existence of the 'concealed deficit' and to tell a lie chased the 'distinguished securities family' Yamaichi to the place choseing voluntarily the death as an enterprise."

"The fact that the realities of management was far worse than the one having been made public and was in critical situations has been kept secret even in-house. As a result, the employee of large majority faces the 'Sudden death of the company' without any mind to prepare. The management executives are guilty in double aqd  triple."

"The bankruptcy of listing Zenekon (the major builders) was successive this year with the Tokai Kogyo, the Tada Construction, and the Daito Kogyo. In all cases, the corrected balance sheet that the debt had swollen up far before the bankruptcy was shown to the participants after a while from bankruptcy. Afterwards, the farce play is repeated, which the Zenekon having extended the rumor of the management crisis announces the restructuring plan and soon they put out the comment as 'The support of the bank is thorough.' The market excluding a part doubts the foresight of rebuilding and there are also many companies whose stock price has been fallen further. There is the same composition as the Yamaichi Securities that was carried off its feet after keeping to conceal the flight."

"The market functions just when all the participants keep the rule. An opaque market in which lie and cheat are allowed can do nothing but lose trust and decline. We could say that the failure of the Yamaichi Securities is the appearance of the market self-cleansing action that excludes the participant who continues the opaque management and breaks the rule."

We see here a deliberation and a cheating -mostly unconscious- of the bourgeois, liberal public opinion, which substitutes the problem for the lack of morality of the manager and tries to clear the failure of the Yamaichi Securities away as it is only an accident, an individual occasion and a special instance.

However, we cannot think such way of course.

The Yamaichi Securities failed for the enormous amount of ex-book debt, and it is said that most of the ex-book debt was invented by "Flight."

The flight is the way to get the other companies to buy the stock temporarily to conceal the failure when a big loss was occurred by the stock that a customer bought, and it became popular at the bond crisis of 1991 and 1992 year. It was legally prohibited.

The promise to buy back with adding some interest is performed when to get the other company to buy, so it does not give any "trouble" to the opponent enterprise. It is usual that such operation is done before settling the accounts, it is "flied" again to another company when the received company comes to the settlement of accounts, so the price of the stock is lifted in every case in addition. Therefore, it is also possible that the Yamaichi Securities invented enormous amount of loss by such an operation.

They say that the time the Yamaichi Securities began to do "Flight" was about in the year 1991 or 1992, so it was exactly the time the "Flight" became a problem socially, became a fuss and was prohibited.

Why has the Yamaichi Securities still continued such a way yet? It might be not to have stopped even if they wanted to stop. Moreover, it might be from the reason they did not think that the fall of stock prices continues so long.

No matter how one do flight if stock prices recover and moreover rise rapidly the problem is dissolved all at once, neither any "Illegality" nor "Lie" or "Betrayal act" remains.

For instance, we don't mind if a loss of 100 billions yen becomes 150 billions yen by many times of "flight" in case that the stock price rises twice. Far from being "crime," "flight" becomes a correct and wise managing act and the one to be admired; the reason for it is that the important customer did not part owing to it and they also do not receive the loss and the company was able to raise the profit, too.

Oppositely, such a manager who does not even flight, behaves honestly but foolish, loses the confdence of the company, and the customer run away might be a disqualified. It might be certain that such inflexible and "incapable" manager is kicked down at once in the company.

The stumble is that the stock prices (and, also the price of land) have been sluggish indefinitely, and it is the all. I wonder who forecast that the "property recession" lasts even so long.

They say that the management lacking of "transparency" is harmful and lie is not good, however which manager of the modern big enterprise will dare or has dared to "announce officially" all the truth of thier enterprise? All the managers know that if they do these kind of things it is likely to become big minus to the enterprise, especially, an enterprise with defective management can do nothing but failure at once. It is necessary to conceal the minus information and it is necessary to get over the enterprise crisis before being revealed. What is a foolish and comfortable viewpoint to think in this bourgeois society that all will go well and be solved if they announce the enterprise crisis officially or if they clarify the truth of management!

There is nothing more nonsense than to demand morality to bourgeoisie under the capitalistic production style. The predominant one is the profit and the continuance of the company here, and all is subordinated to this. Just so, the capitalism is exactly the capitalism.

There are many companies where the "Rumor" are going around to be letting fly and to be said in the crisis now. However, will or can such companies "announce officially" all the management and clarify the crisis themselves?

They might have to determine the crisis of not only the failure of an individual enterprise that "announce officially" but also the entire capitalistic economy to do these kind of things because there might exist exactly a great many of such companies as "to sweep and throw away."

And again, which company will or can continue the management with talking to the employee as "our company is in crisis, to be fully prepared, to find also the following work?" I wonder whether it is too clear that the employee's morale would become weak, the working desire would become wither, and the company would not be able to keep only a day if they would do such a thing.

It is not able to "announce" the truth of management essentially in the this society where capital rules. Of course, it might be possible when the company is in good condition, but the inconvenient facts will be concealed and are being concealed still now. It might be the one named crying for the moon to expect "the truth of unconcealed" in this capitalist society. It is necessary to raise the capital society if we expect the truth and hope for the society where only the truth passes.