Between Empire and Nation: A Micro-Historical Approach to Japanese Repatriation and the Korean Economy During the US Occupation of Korea,1945–6

Herded onto dirty wooden ships they begin the trip back – a trip short in miles, but long in degradation and defeat. Headed for the Japanese ports, their faces betray shattered dreams of a triumphal homecoming as imperial conquerors of the world. Without a backward glance upon the ‘Hermit Kingdom,’ they leave a country in which they have completely dominated thought and action since 1910. ¹

On 6 November 1945, the last Japanese military unit in southern Korea departed the port of Pusan for Japan. Their withdrawal marked the official end of Japanese military disarmament and the end of a Japanese military presence in the southern half of the Korean peninsula that had lasted for more than 35 years. At the end of the Pacific War on 15 August 1945, there were approximately 1.5 million Japanese in Manchuria and more than one million Japanese in the Korean peninsula. The collapse of the Japanese empire fragmented the territories formerly under Japanese control and the Allied apportionment of spheres of responsibility created new borders where none had previously existed. Specifically, the Korean peninsula was divided at the 38th parallel to create separate zones of occupation administered by Soviet and US military forces. After the Japanese surrender, many Japanese in Manchuria and Korea decided to return to Japan but faced difficulties in gathering their possessions and finding transportation, both overland and across the sea. After the US arrival in southern Korea in early September 1945, the US military organized official repatriation travel for departing Japanese through the port of Pusan. While the Japanese in southern Korea were quickly repatriated through the end of 1945 and the beginning of 1946, the Japanese in Manchuria and northern Korea faced obstacles in crossing the Manchurian–Korean border, as well as the 38th parallel within Korea, due to frequent border closures. In June 1948, the Soviet command declared an end to Japanese repatriation and the final tally indicated that 914,000 Japanese had returned to Japan from Korea and Manchuria. ²

In much of the existing historiography, the issues of repatriation and refugee flows have been mainly addressed within a European context. ³ Examination of repatriation in Asia has been an under-addressed field of inquiry. Furthermore, the official statistics and descriptions of the Japanese repatriation process, as formulated by US occupation officials and argued by McWilliams, have been generally presented as a straightforward exercise in the counting, control, and return of the defeated Japanese population. As indicated by the quotation above from the official US military history, the Japanese in Korea suffered hardship and humiliation as they left the peninsula to return to Japan without triumphs or treasure. Much of the self-produced Japanese repatriate [J. hikiagesha] literature reinforces this image. According to Mariko Tamanoi, many of the hikiagesha stories depict the hardship, troubles, and personal tragedies faced by the Japanese at war’s end. Typical narratives include long treks under harsh conditions, brutal treatment by locals and occupying forces, as well as the tragic recollections of parents forced to sell, abandon, or kill their children. ⁴ Similarly, Choi Yo˘ng-ho and Cho˘ng Pyo˘ng-uk have focused on the establishment of former settler groups that sought the redress of property issues or other colonial-era issues through group formation. ⁵

The official histories and the general understanding of the period present an incomplete picture of the Japanese repatriation process, mainly for the elements that are either missing from or obscured by the master narratives dictated by nationalism and Cold War politics. While the immediate post-Liberation period of South Korean history is relatively unknown, the primary focus of most histories of this period has been upon the US occupation, the political history relating to Cold War tensions, and the Korean War. In this respect, the US occupation period of southern Korea has often been overshadowed by the Korean War and examined by numerous scholars within the context of the origins of the war. The critical framework of previous scholarship has usually centered on Cold War political conflicts between two opposing forces, a binary of either the United States of America and the Soviet Union or Korean rightists and leftists. Whether considering the international aspects or the domestic origins of the war, both narratives follow a similar pattern. After an outline of the colonial period and its influence on the post-Liberation division, these studies inevitably turn to political factors in understanding the US occupation period as the prelude to the outbreak of war. This focus assigns primary historical agency to the USA and the Soviets, while relegating the Korean and the Japanese who were in the peninsula to relative obscurity. ⁶

Utilizing a micro-historical approach to US occupation records, this article presents two related arguments about Japanese repatriation in US-controlled southern Korea during the immediate post-Liberation period. First, repatriation unfolded through a three-phase process that reflected both the historical agency and the diverse motivations of the Japanese and Korean peoples in the peninsula and abroad as they stood at the transition between empire and nation. In the first phase of repatriation from 15 August to 8 September 1945, Japanese settlers decided for themselves whether to stay in Korea or go back to Japan and began to determine their own identity within a post-empire nation-state system. Repatriates in this period began unsupervised movements using ‘secret ships’ to successfully move their families and possessions back to Japan. However, their decisions were conditioned by push-pull factors that were partially determined by actual or perceived incidents of Korean retribution against the Japanese.

After the US arrival in southern Korea on 8 September, the second repatriation phase was a period of voluntary but regulated repatriation. The US instituted searches and seizures of money and assets that the Japanese attempted to smuggle back to Japan as they were repatriated through Pusan. Although US controls reveal the micro-level processes of dismantling the Japanese imperial economy and creating separate national economies in Korea and Japan, specifically through separate national currencies, Japanese repatriates evaded the controls through creative counter-measures.

The third and final repatriation phase began on 8 October 1945 with the US military government’s order of forced repatriation and ended with the last repatriation of Japanese civilians in 1948. As Lori Watt argues, the expulsion of all Japanese from the Korean peninsula occurred concurrently with the forcible assignment of national identity. Although some Japanese settlers had no desire to leave Korea, forced repatriation left them little choice but to return to Japan and become ‘Japanese’. ⁷ While Watt has clearly outlined the forcible nature of repatriation and the problems of reintegration back into Japanese society for repatriates, her discussion elides the micro-level choices and decisions taken by the Japanese as they left the peninsula.

The second argument of this article addresses the economic collapse of the Japanese imperial economy and the rise of separate Korean and Japanese national economies. The collapse of the Japanese empire sundered Korea from the imperial Japanese economy but also fragmented the domestic Korean economy. The wartime Korean economy had been subjected to colonial overdevelopment that had served Japanese metropolitan needs rather than Korean society. However, the postwar division of the peninsula into northern and southern occupation zones further splintered agricultural and industrial production. In the midst of the economic chaos, Japanese repatriation and the development of the secret ship system created new economic connections between Japan and Korea. In addition to smuggling Japanese settlers and their possessions back to Japan, secret ships transported black market goods, including devalued currency, between Korea and Japan. In other words, the fragments of empire were being reassembled into new postwar configurations that were dependent on individual choices being made at the ground level by the Japanese and the Koreans. ⁸

In recent years, the Japanese settler population in Korea has become the subject of increased academic research, particularly regarding their intermediate role between state and society and between nation and empire. While these studies have expanded the possibilities for understanding colonial society from the settler’s perspective, not enough scholarly attention has been paid to the repatriation of the Japanese. The Japanese settlers formed an important segment of colonial society and their postwar repatriation was equally significant both for how they left and the implications of postwar Japanese and Korean society. Many studies on post-Liberation Korea mark the absence of the Japanese and the implications for Korean society and economy, but not necessarily the manner of their departure. The story of postwar repatriation has been subsumed by various historical and historiographical factors, including the aforementioned narratives of the Cold War and the Korean War. In addition, the reluctance of the Japanese to address the repatriate issue, combined with Korean emphasis on Liberation, division, and nation-building in both halves of the peninsula, has contributed to the general lack of attention. ⁹

The micro-historical approach utilizes US occupation records and histories, but also exposes the voices of individual Japanese and Koreans through the letters monitored by US intelligence. In a historical period that has been traditionally examined through state-to-state relations and Cold War politics, micro-history allows for a bottom-up perspective of individual lives and repositions the Japanese and Koreans as historical subjects rather than the objects of US and Soviet politicking. In addition, an examination of individual motives and quotidian actions offers alternative interpretations beyond the nationalistic perspectives that are anachronistically projected backward onto this period by Korean and Japanese historiography. ¹⁰

While this article focuses on Japanese repatriation from Korea, it can be considered a case study within a larger academic debate about the long-term processes and implications of decolonization and the fragmentation of empire. As a nascent field of enquiry, decolonization studies has attracted recent attention, particularly in terms of the rise of a postcolonial urban and Westernized intellectual class that promoted anti-imperialist nationalism. ¹¹ It is clear, however, that any discussion that addresses the complexities of decolonization will have to address the repatriation process and its consequences for both repatriates and those who remained behind.

On 8 August 1945, the Soviet Union officially terminated its neutrality pact and entered the Pacific War against the Empire of Japan. Soviet forces crossed into Manchuria and northern Korea on 9 August through the dispatch of air and ground forces. The Soviet invasion and the subsequent Japanese surrender on 15 August, initiated a massive population shift of Koreans and Japanese throughout Manchuria and northern Korea. Throughout the 1930s, Japanese peasants, soldiers, and company workers had immigrated to Manchuria until there were over 270,000 Japanese throughout Manchuria. ¹² By 1945, there were approximately 100,000 Japanese residents in the former Manchukuo capital of Changchun, renamed by the Japanese as Shinkyō [Ch. Xinjing]. Many Japanese throughout Manchuria fled or were forced out by the Soviets, including 20,000 members of military families and 17,000 family members of South Manchurian Railway Company (SMRC) workers. These Japanese refugees were often carrying six months to one year’s worth of salary in nearly worthless Manchurian currency that they were desperate to convert to Bank of Chōsen [J. Chōsen ginkō, K. Choso˘n ŭnhaeng] or Bank of Japan [J. Nihon ginkō,] currency. ¹³ Some evidence suggests that the Chinese branches of the Bank of Chōsen were looted by the departing Japanese with the official bank records either destroyed or taken to Japan. ¹⁴

The first phase of repatriation began before the Japanese surrender with the Soviet entry into the war. In one account, Japanese and Koreans living around the Chōsen Nitrogenous Fertilizer Company in Hŭngnam, South Hamgyo˘ng province, were told to flee the approaching Soviet army. Trains filled with refugees were coming south from Ch’o˘ngjin in North Hamgyo˘ng as bombs were dropped from Soviet airplanes. Although the Japanese refugees attempted to withdraw their savings from the Ranam branch of the Chōsen [J. Chōsen shokusan ginkō, K. Choso˘n siksan ŭnhaeng, hereafter CIB] or other financial institutions in Ch’o˘ngjin, all withdrawals were denied. ¹⁵ In the face of the Soviet invasion, Japanese banks burned their cash and fled south. For example, the manager of the local Bank of Chōsen branch in Rajin, North Hamgyo˘ng, set fire to three million yen of currency in the bank vault and escaped south with six million yen to the city of Ch’o˘ngjin after the Soviet invasion. ¹⁶ One 19-year-old Japanese woman who worked at the Bank of Chōsen branch in Ch’o˘ngjin fled with her family on 13 August. After walking for three days, they arrived in the town of Yo˘ng’an, North Hamgyo˘ng, where they were able to board a train headed south. After switching trains several times, they arrived in Seoul where they were able to withdraw large amounts of cash before heading to Pusan. After waiting in Pusan for 20 days, they boarded a ship headed to Japan. ¹⁷

The first phase of repatriation from 8 August lasted one month until the arrival of US military forces on 8 September. This phase can be characterized as an unregulated exodus of Japanese who decided to leave Korea of their own volition. Wayne McWilliams estimates that approximately 160,000 Japanese civilians left before the US established control over the repatriation process. During this phase, there were no official controls on the Japanese or their possessions, thus allowing the early repatriates to take whatever currency, assets, or personal property that they could physically transport back to Japan. The Japanese in Korea and Manchuria, as well as the Koreans in Japan, began a spontaneous and unregulated migratory movement, mainly between Hakata in southwest Japan and the port of Pusan in Korea. In this period, those who returned to Korea and Japan were a self-selecting population who identified themselves with their ostensible country of origin for social, cultural, or economic reasons, rather than having their identity determined by some overarching authority. ¹⁸

The fleeing Japanese hired whatever transportation was available for the journey to Japan, including the ‘secret ships,’ which were privately-owned vessels that transported paying customers between Korea and Japan. At war’s end, Governor Nobuhara Akira of South Kyo˘ngsang province instructed people to leave their homes and head for the port cities for immediate evacuation. ¹⁹ Many Japanese heeded Nobuhara’s advice and left by any available ship. In a letter that Yamamoto Shizuko wrote from Shimonoseki to Yamamoto Onokichi in South Kyo˘ngsang province,

I reached Japan by the ship Seisho-Maru. The ship is about 40 tons and carried 100 men and a great deal of Japanese baggage. I payed [sic] 1100 yen for 9 pieces of baggage and myself. When you go to Japan try to take the same ship I did. ²⁰

Throughout the repatriation process, there were many factors that affected the movement of the Japanese out of Korea, some pulling the Japanese but many others pushing them out of Korea. One of the most significant factors pushing Japanese settlers out of Korea was a general fear of Korean retribution. In the days following the surrender, many local Korean communities organized so-called peace preservation committees [K. ch’iandae, J. chiantai]. While some committees maintained law and order, other committees engaged in large and small-scale acts of reprisal against the Japanese and Korean collaborators. Many Japanese who lived in the rural areas of the peninsula withdrew into larger urban areas to find greater security for themselves and their families. Also, Japanese traveling on the trains became targets for robbery by Koreans. Japanese railroad workers and staff were often forced to pay bribes to Korean gangs to purchase safe passage for their trains. In Seoul, the Korean Communist Party opened its offices in Chongno immediately following the surrender. Although the communists posted placards promoting cooperation with the Japanese settlers, many Japanese were still fearful of retribution from Korean communists that had been persecuted during the colonial period. ²¹

More importantly, Japanese perceptions of Korean antipathy were shared among the Japanese and assumed a life of their own. Regardless of the actual acts that underlay news and rumor, many communications among the Japanese spoke of the potential for violence and indicated the desire of many Japanese to leave Korea or to encourage other Japanese to leave. In one example from late September 1945, a Japanese civilian named Kumagai sold his home to a Korean, in preparation for returning to Japan. The Korean buyer paid 5000 wo˘n as a deposit and Kumagai gave him a receipt for the money. Two days later, the Korean returned with several other Koreans who claimed membership in the ‘Independence Army,’ and stated it was illegal for Japanese to sell their property. The Koreans attached Kumagai, stole the deposit money, and refused to return the receipt. On 10 October, the Koreans returned, forced him to sign over the home without payment, and then forcibly evicted him. ²²

However, there were also push and pull factors that motivated the Japanese to remain in Korea. Many Japanese settlers were peasants who had often sold all their possessions in Japan to immigrate to Korea; therefore, they had no home to which they could return. Also, they were viewed as tainted or unclean by the local communities because of their overseas travels. Civilian Japanese women returning from postwar Manchuria were suspected of sexual contamination, while men and women returning from socialist countries were associated with communism. ²³

As Jun Uchida has detailed, the Japanese settler community in colonial Korea adopted an intermediate position between the Korean population and the colonial government that allowed them to selectively align themselves based on their collective and individual interests. ²⁴ Even after the end of the war, the Japanese in Korea were concerned first and foremost with their personal needs. Some Japanese settlers in Korea had established lives and property in Korea which they were reluctant to abandon. The above-mentioned evacuation order by Governor Nobuhara drew sharp criticism from long-term Japanese residents in Pusan. These Japanese said Nobuhara should be focused on establishing a consulate and schools for children of a future Japanese community. ²⁵ Consequently, the issue of the Japanese remaining in Korea or going back to Japan was a pressing concern for the Japanese colonial government. In a meeting, a few days after the Japanese surrender, between Governor-General Abe Nobuyuki and Shiraishi Muneki, a Japanese businessman from Hŭngnam, Abe expressed uncertainty about US occupation policies. Shiraishi said, ‘They will undoubtedly let [Japanese] people stay and probably let them continue to work [in Korea].’ Abe replied, ‘I think that would be fine. The Japanese government has spoken about letting [Japanese] permanent residents remain’. ²⁶ However, Abe expressed his concern, somewhat presciently, about whether or not the Japanese would actually be permitted to remain in the future.

As many Japanese settlers wished to remain in Korea, some prominent individuals were called upon by the colonial government to create an institutional mechanism to aid the resident Japanese community in the form of the Seoul Japanese Relief Society [J. Keijō Nihonjin sewakai]. Governor-General Abe asked a group of high-ranking Japanese settlers to create an organization that would survive the demise of the colonial government but still act to protect the Japanese settlers. As was apparent during the repatriation process, the first duty of the relief society was not to aid the Allied occupation, but to protect the welfare of the Japanese settler community from the Allied forces and the Koreans as much as possible. The opening meeting of the society was held on 25 August at the Kyo˘nggi Chamber of Commerce, Industry, and Economy with seventy people in attendance. In his first speech as president, Hozumi Shinrokurō stated that the society would support all the Japanese, including those who wanted to return to Japan and those who wished to stay in Korea. ²⁷

The US military forces sailed into Inch’o˘n harbor on 8 September and began establishing control over the southern occupation zone. ²⁸ The arrival of the US forces initiated the second period of repatriation, which was still voluntary for the Japanese but also saw the implementation of increasingly strict regulations and controls. The US began immediately repatriating Japanese military personnel, which was accomplished by early November 1945. As for the civilian population, the US had no definite plans for civilian repatriation during the first month after their arrival. However, they began the classification process that assigned ethnic identities to the resident population in the southern zone for the purposes of regulating the Japanese. As Lori Watt describes it, Japanese civilians were integrated into the repatriation system on 23 September, after military repatriation was underway. The Japanese settlers who wished to return could register with their local community association prior to being called down to Pusan. However, the same push and pull factors mentioned above were still operating in the decision-making processes of individual Japanese whether to stay or go. ²⁹

For example, train robberies and road blocks continued to be daily occurrences, even after the US established control in the southern zone. Trains transporting Japanese civilians to Pusan for repatriation were frequently boarded by small groups of armed Koreans who robbed the Japanese and then disappeared. The US assigned military police to each repatriation train, but the Japanese were still forced to pay money to the Korean engineers and railway staff that had taken over the driving and maintenance duties. The US military police allowed the extortion to continue as the payment of ‘extra thanks money’ for safe passage. US records also cited numerous Korean groups like the Pusan Justice Society and the Iron Blood Party, which deliberately terrorized Japanese railway passengers to frighten them into immediate repatriation to Japan. In late October, a ‘farmer’s committee’ [K. nongmin hyo˘phoe] established a road block near Pusan and targeted vehicles transporting Japanese. The Koreans demanded 500 to 1000 wo˘n per vehicle as a toll and collected 24,500 wo˘n before being arrested by US troops. ³⁰

Although US forces began arriving on 8 September, US control of Japanese repatriation was only established after enough US forces had arrived in the peninsula to establish physical security. After disembarking from troop landing ships in Inch’o˘n, the 40th Division was ordered in Field Order No. 56 (21 September 1945) to move to Pusan and supervise the disarmament, control, and repatriation of the Japanese. The 160th Infantry Regiment was specifically tasked with processing and loading Japanese military and civilian personnel from throughout southern Korea onto ships in Pusan. By 26 September, the Japanese garrison in Pusan had been evacuated and the 160th Infantry Division had replaced the Japanese guards at most installations. ³¹

The official site of embarkation and disembarkation was limited to Pier No. 1 in Pusan Harbor, where the minimum rate of evacuation for Japanese troops and civilians was set at 4000 people per day, based on the estimated number of trains and ships arriving and departing. Although the quotas and plans were set several days in advance with a mandated 5000 person surplus in the assembly area, mechanical malfunctions and logistical delays were unavoidable. At the same time, US forces supervised the arrival of Koreans from Japan and other parts of the former Japanese empire through the same pier. For example, the first refugee ships, the Konei Maru and the Koan Maru, brought 7031 Koreans from Japan while taking 3675 Japanese troops and 5341 civilians to Hakata on 26 September. By the end of the first week, 23,843 soldiers and 17,413 civilians were evacuated. By 18 October, almost all Japanese soldiers that had been located in southern Korea had been evacuated back to Japan. The cycle of repatriation was continuously repeated as Koreans abroad were repatriated to the peninsula and the Japanese soldiers and settlers were shipped out to Japan. ³²

The process of repatriation differed for Japanese soldiers and civilians. All Japanese soldiers were disarmed and closely inspected by US military personnel according to a set procedure. Rows of Japanese soldiers were marched onto Pusan Pier No. 1 and instructed to open their packs for inspection. US soldiers searched the bags, confiscated contraband goods, and sent the goods to nearby warehouses. After one Japanese group was processed, another group took its place and the process was repeated at a rate of 500 soldiers per hour, 24 hours a day. As described in the official history, ‘at night, searchlights from a docked U.S. destroyer assisted in the illumination of this grimly systematic search and etched in fantastic shadows the silent and passive movement of troops and civilians across the Pier’. ³³

Strict policies were forced on the outgoing Japanese to ensure that they were not taking contraband or looted assets that properly belonged to the Koreans. The US military issued orders at the beginning of the official repatriation process on 27 and 28 September that limited the baggage and currency that Japanese were permitted to carry. Each civilian was allowed to take 1000 Japanese yen, or yen issued by the Bank of Japan. Japanese military personnel were limited to 500 yen for officers and 250 yen for enlisted men. Any excess amount was confiscated and deposited in a special account at the Bank of Choso˘n. The confiscation orders were later amended to include looted jewelry, financial instruments, letters of credit, and other monetary certificates. All weapons, including swords, pistols, binoculars, rifles, and carbines, were collected and sent to a central warehouse. Although the inventory of weapons was periodically reported to the military headquarters, the weapons were classified as ‘war souvenirs’ and allocated to occupation units based on time in service or they were sent as merchandise to gift shops located on US military bases. ³⁴

The issue of Japanese baggage was a persistent problem from the first days after surrender and illuminated both Japanese and US attitudes toward the repatriation. In his inaugural address to the Seoul Japanese Relief Society (SJRS), Hozumi said in regards to the everyday problems:

The first issue is the safekeeping of belongings [nimotsu], which will be placed in rice warehouses. Real estate will be entrusted to the Government-General and the plan is to rely on the Chōsen Trust Company [J. Chōsen shintaku (kabushiki kaisha)], but this is as far as the discussions have gone. ³⁵

Hozumi was aware that Japanese repatriates were already returning to Japan in any available craft, while they had many more personal belongings that would not be making the initial trip back to Japan. Under those circumstances, he believed that Japanese property would be respected and eventually returned or forwarded to their owners or that the owners would eventually return to Korea to reclaim their belongings. Thus, he stated the need to establish appropriate safekeeping mechanisms for personal property, which he apparently assumed that the US occupying forces would respect. Consequently, the society stored the excess baggage of repatriates, nearly 20,000 wooden crates neatly tagged with names and addresses, in rice warehouses, in addition to arranging the sale of household furnishings and clothes left behind. Ultimately however, these belongings were seized by the US military government and sold as souvenirs to US military personnel. ³⁶

At his first press conference on 8 October, General John R. Hodge, commander of the US forces in Korea, ordered the repatriation of all Japanese in southern Korea. As Lori Watt argues, postwar political settlements and the repatriation allowed the Allies to redraw both the maps of Asia as well as the boundaries of identity. For Japan, their multiethnic East Asian empire was reduced to a homogenous island nation, while the postwar sorting and deporting of the Japanese people from former colonial territories like Korea led to unequivocal determinations of national identity. ³⁷

General Hodge’s order marked the beginning of the third and final period of repatriation, or the forced identification and deportation of all remaining Japanese in the southern occupation zone. From this point, no Japanese were permitted to remain in southern Korea but were required to dispose of their possessions, register themselves with the relief society and wait their turn for deportation. In the beginning of the repatriation process, the evacuation of Japanese troops had taken precedence over Japanese civilians until mid-October. About 25,974 civilians were processed from 28 September to 18 October, but their numbers increased with the completion of military repatriations. From 18 October to 15 November, about 1,643,344 civilians were evacuated to Japan. ³⁸

In the beginning, civilian inspections were not thorough, especially for women. However, reports from the G-2 Intelligence section indicated that civilians were smuggling large amounts of contraband out of the country. One letter writer said:

I hear that the United States Army required the Japanese to be limited to cash or checks of not more than 500 yen and their inquiry is severe … This point is brought to your attention so that you can sew your money inside your pants or prepare other safer means. ³⁹

Other sources indicated that Japanese soldiers used civilians, particularly women, to carry out excess currency. One Japanese person wrote in a letter on 13 October, ‘When you go to Japan have a woman carry your money as the United States Military are not strict in the search of women’. ⁴⁰

Once the US authorities saw these reports, they implemented rigorous screening of Japanese males by US soldiers and Japanese women by Korean women. The increased scrutiny found money hidden inside thermos bottles and baby blankets, as well as money sewn into the linings of clothes. One sergeant found 80,000 yen hidden inside a walking stick carried by an old man. In response, some Japanese converted their money into clothing and articles valuable in Japan. One soldier threw away all his military equipment and filled his bag with cosmetics and lingerie. A civilian repatriate packed 70 kimonos of high-grade hand-stitched silk. ⁴¹

The implementation of stricter controls initiated an escalating series of measures and counter-measures between Japanese repatriates and the US military authorities. Since controls at the official checkpoints in Pusan were becoming more stringent, some Japanese began contracting with secret ships to transport them and their belongings to Japan by evading the US controls. The Civil Censorship Department found numerous letters referring to secret ships and illicit traffic in people and goods across the strait to Japan. ⁴² However, repatriation by secret ship was far from safe, due to leftover mines and even pirate activities in the area. One letter dated 19 September 1945 described how a secret ship headed to Shimonoseki hit a mine that killed half of the passengers. ⁴³ On 16 November, a Korean tugboat called the Nikai Maru sank after hitting a mine in Pusan harbor. Ten Koreans were rescued and taken to Pusan city hospital for treatment. ⁴⁴

As for piracy, the passenger ship Taiho Maru arrived in Pusan on 8 November 1945, with nine Korean repatriates and three corpses. Three pirates boarded the ship at Shimonoseki, which was the last stop before Pusan. On the way to Korea, the three pirates pulled guns to take control of the ship. The captain was forced to redirect his ship to the nearby island of Ikishima, where the pirates robbed the passengers of their valuables and then killed 14 passengers. The pirates threw 11 bodies overboard before escaping in an open rowboat toward a small, unidentified island near the northwest coast of Kyūshū. ⁴⁵ Piracy was such a problem that some Japanese advised future repatriates to avoid traveling on secret ships and to return to Japan by official steamer instead. ⁴⁶

In response to US inspections and the danger of mines and pirates, Japanese repatriates adopted another tactic to maximize both their safety and that of their possessions. Many Japanese began pooling their possessions and luggage and then entrusting it to secret ships, while subjecting themselves to the official repatriation process at Pier 1. On 24 October, the 40th Military Police Detachment in Pusan discovered and boarded a secret ship on its way to Japan and found it loaded with unauthorized repatriates and contraband goods. Upon being interviewed, the smugglers confessed that many repatriates had combined their luggage while they underwent official repatriation. ⁴⁷

The organization behind the evasion of US controls was not a shadowy criminal enterprise, but rather the Seoul Japanese Relief Society and its associated offices in the main Korean cities. In a letter dated 15 October, Takemoto Hiroo wrote to Tanba Hikoichi stating:

there are many secret ship companies in PUSAN. The prices are posted on bulletin boards and are usually about 150 yen per person. In going by secret ship you also avoid inspection by the military police and Korean women. The Nippon Sewakai Relief Society will tell you what companies to go to for secret passage. The relief society is located in front of the PUSAN railroad station. Three ships are sailing, one on the 16th one on the 17 th and one on the 18 th. P.S. If you are smart you can carry a large sum of money with you. ⁴⁸

In addition, a letter from Yonemura Toshihara in South Cho˘lla province to Shimezu Chotaro in Hiroshima indicates both the organized nature of the smuggling activity as well as its availability on both Korean coasts.

Many secret boats sail for Japan from Moppo [Mokp’o] and Leisui [Yo˘su] in rapid succession. The charge is 500 to 600 yen for one passenger and 100 yen for baggage. My application has been submitted to the ‘Nippon Sewakai’ and I must now await my turn to go back to Japan. ⁴⁹

Apparently, sailing from the west coast was nearly three times more expensive than departing from the east coast, but the process was streamlined to the extent that applications were being submitted and accepted in an orderly fashion.

By November 1945, the process of smuggling luggage by secret ship was being openly run by companies through their branches in Korea and Japan. One letter-writer stated that he dropped his baggage off at the Jinyoku Shinkai Industrial Company to be sent by secret ship. The company’s branch in Shimonoseki would call the recipient for pickup once the baggage arrived. ⁵⁰ Ironically, one official history of the occupation states that the number of smugglers caught by the military gradually decreased until the US Navy essentially declared victory over smuggling and ceased its coastal patrols in mid-November. ⁵¹ However, letters monitored by the censorship department after mid-November clearly indicate that smuggling of goods and people was ongoing and even increasing in scale and scope.

The practice of smuggling was a fundamental component of the repatriation process, since repatriates were taking a one-way journey back to Japan. On the one hand, entrepreneurial repatriates who were leaving Korea for good did not simply take their personal possessions, but carefully packed goods that could be sold or bartered back in Japan. Since currency limits were in place, the repatriates could convert their available cash into transportable items for resale in Japan. Several letter-writers advised future repatriates to bring all the soap, rice, candles and other sundry items they could find for trading purposes. ‘You can easily bring ¥50,000 to Japan from Korea if you hide it in the lining of your rucksack. I will be happy if you are able to bring clothing, shoes, thread, and soap when you return to Japan’. ⁵²

On the other hand, smuggling was also an important and ongoing economic activity for those with the skills to seek new opportunities in the postwar economy. Professional smugglers arranged for multiple journeys on the secret ships to move goods from smaller harbors and coves along the Korean coast, such as Masan, Mokp’o, and Chinhae. One person urged his friend to find a market for black-market silk. ⁵³ Another person discussed his round-trip smuggling schedule between Pusan and Japan, but mentioned that his six-man crew would be available in Pusan. ⁵⁴ Sinojo Takeo in Fukuoka wrote to Hagino Shigetoshi in South Kyo˘ngsang province, ‘let me know if there is plenty of sugar in Pusan. If so I will come to Pusan and plan a black market in Japan’. ⁵⁵

The regional East Asian economy built by the Japanese empire had crumbled following the Japanese surrender. The wartime trade routes between Korea and Japan had ceased to function, with goods for export left sitting on the railway lines and at the ports with the abrupt end of the war. ⁵⁶ However, the repatriation process and the rise of the secret ship industry filled the vacuum following high demand from individual Japanese as well as the US-mandated repatriation of all Japanese. The rise of postwar smuggling as part of the repatriation process partially restored the broken trade connections between Korea and Japan and recreated some aspects of the wartime economy that sent Korean goods to Japanese markets.

A more pressing concern for all concerned, including the US authorities, the Koreans, and the Japanese, was how to address the issue of currency. At the end of the war, the Bank of Chōsen and the CIB retained their status and authority as two of the most powerful and prestigious institutions in post-colonial Korean society. More importantly, the banknotes of the Bank of Chōsen were still recognized as legal tender and used in daily transactions. As Karl Moskowitz clearly shows, control of the branches of the CIB passed from the Japanese to the Koreans at speeds that varied by location, but the transfer was largely peaceful and orderly. ⁵⁷

The operational situation at the Bank of Chōsen was slightly different since there were far fewer Koreans working there than at the CIB, but as the central bank, the Bank of Chōsen faced a more immediate problem as a panicked populace and other banks were demanding cash immediately. The demand for cash came from both Japanese and Korean sources throughout the peninsula. Demobilizing Japanese troops sought final paychecks, company owners liquidated their businesses, individuals withdrew their savings, repatriates needed cash for travel and relocation, and a flood of refugees streamed across the border from Manchuria to merge with the large population movements already occurring within the peninsula.

During the colonial period, both Korea and Japan used yen-denominated currency, although they were issued by different central banks. After Liberation, the US military government decided to keep the Bank of Chōsen currency, instead of issuing occupation currency. The Supreme Commander Allied Powers (SCAP) government in Japan outlawed the use of Bank of Chōsen currency in Japan as it was still nominally recognized as yen currency. Similarly, the US military government outlawed the use of Bank of Japan currency in Korea as part of the process of dismantling the Japanese empire, particularly the regional East Asian economy established during wartime, and re-establishing Korea as an independent nation. ⁵⁸

As stated above, departing Japanese were only permitted to take limited amounts of Japanese yen, or yen issued by the Bank of Japan. Japanese repatriates were not allowed to take Bank of Chōsen wo˘n with them and were forced to exchange their Korean wo˘n at an exchange booth on the pier in Pusan. The unequal value between the Korean wo˘n and Japanese yen necessitated an official exchange rate and military supervision to enforce strict policies regarding exchange. Naturally, the Japanese attempted to evade these currency controls, by hiding rolls of currency upon their clothes or among their personal belongings. As inspections became more stringent, the Japanese became increasingly creative at evading controls. One popular method was to write a check drawn on a Japanese bank, cut it into four equal parts, and send the pieces in four separate letters. ⁵⁹ Since mail service was fairly reliable, these Japanese probably thought that this method was safer than sending money through unaccompanied baggage on the secret ships.

At the official exchange booth, the US allowed the Japanese repatriates to exchange Korean wo˘n up to the limit for their status, whether civilian or military, while confiscating any excess currency, which was deposited in a Bank of Chōsen account. Ultimately, the US collected ¥300,949,105 of excess Korean currency, which indicates that the Japanese settler population was attempting to take their accumulated wealth out of the peninsula back to Japan with them. While the inspections and controls netted a large amount of confiscated cash, the total amount may never be known since the Japanese were already relying on the secret ships and illegal smuggling to transport the majority of their assets. The confiscated currency was partially used however to exchange currency for the incoming Koreans disembarking from the repatriation ships. ⁶⁰ Incoming Koreans were initially free to bring as much Japanese yen or Bank of Japan currency into Korea during the first phase of unregulated repatriation. After 1 November 1945, the Koreans were only permitted to take 1000 yen in cash, 20 packages of cigarettes, and personally transportable baggage only. ⁶¹ Upon arriving in Pusan, the Koreans could exchange Japanese yen for Bank of Chōsen notes at their exchange booth and they exchanged ¥39,313,000 between 21 October and 15 November, which was little more than 13 per cent of the amount that the US confiscated from outgoing Japanese during the same period. ⁶²

The Japanese settler population was clearly attempting to transport their wealth out of Korea to Japan, which created a largely unidirectional flow of capital that was hindered, but not stopped, by official inspections and currency restrictions. Since the Japanese were already relying on the secret ships to transport themselves and their assets, they only needed a mechanism to exchange their Bank of Chōsen bank notes, which were worthless in Japan, into Bank of Japan notes. Consequently, the currency black market was active in both Korea and Japan among both repatriate communities and was a significant component of the illegal smuggling trade between the two countries. On 31 October, an unofficial moneychanger in Pusan wrote to a future Korean repatriate in Japan, offering to change Japanese (Bank of Japan) yen into Korean (Bank of Choso˘n) wo˘n at a 20 per cent discount up to one million yen. The only stipulation was that the currency had to be in 100-yen notes.

The size of the proposed transaction indicates that this kind of currency-trading had moved beyond the transfer of personal wealth into a serious and profitable business, which suggests certain conclusions. First, the avoidance of the official money-changing booth on the Pusan pier indicates that the Korean repatriates wanted to avoid the attention of the US authorities or get a better exchange rate than the official rate. Second, conducting illegal exchange operations meant that the currency could not come on an official repatriation ship but would have to be transported on a secret ship. Third, the scale of the offer suggests that there was a well-established procedure in place to collect the correct amount of Korean currency, exchange the money, and then distribute the Japanese currency profitably. In all likelihood, the Pusan moneychanger could flip the incoming Japanese yen to outgoing Japanese repatriates, who would likely sell their Korean wo˘n at a discount. ⁶³

The discount rate seems to have been the standard rate for the currency black market in Korea, since the Counter-Intelligence Corps (CIC) reported in early October that the unregulated exchange rate was 12 Japanese yen for 10 Korean wo˘n. The uneven exchange rate was attributed to the fact that banks and post offices were not exchanging money after Japanese yen had been outlawed, so there was no legal way to exchange currency. Since the Japanese yen was technically worthless in Korea, it was trading at a discount relative to Korean wo˘n. The relatively small discount suggests that there was still some demand for the Japanese currency, likely attributable to the number of Japanese who were still returning to Japan.

By late November however, a South Kyo˘ngsang province resident described a worsening rate of exchange. ‘Because the use of Japanese currency is prohibited here those who have returned to Japan are experiencing financial difficulties. In Pusan, however, Japanese currency is still in use at a 50% discount’. ⁶⁴ Since the official repatriation process was winding down after most of the Japanese settlers had returned, the discount rate of the Japanese currency was increasing with lower demand. However, the fact that the currency still retained some value, despite being worthless in the peninsula, suggests that there was still some demand for the currency and some type of currency-trading was occurring. In early 1946, the United Kingdom mission in Japan reported on the plethora of black market activities between Korea and Japan during the occupation period. ‘Black market operators continue to deal in the exchange of Korean and Japanese bank notes, sugar, Japanese army trucks, rice, bean oil, petroleum and secret shipping to Japan’. ⁶⁵

An additional factor in the declining value of the Japanese currency may have been the inflationary trends that had taken hold of both Japan and Korea. According to a comparative price index constructed by Cho˘ng Chang-yo˘n, commodity prices in Seoul increased tenfold between June and September of 1945, compared to a 14 per cent increase in Tokyo over the same period, at least for commodities under price control. ⁶⁶ However, the evidence in the letters suggests that consumer commodities may have been more widely available in southern Korea, particularly around Pusan, than in Japan from the number of letters urging Japanese repatriates to stock up before returning. In one letter from 8 October, Otsu Toshiko in Japan wrote to Otsu Iwao in Pusan, ‘When you return to Tsushima by secret passage ship, bring your money secretly … Secret ships enter Sasuna or Hidakatsu every day. When you come have Captain load the ship with soy beans, salt, lima beans and rice’. ⁶⁷

Regional variations in production and migration across the Korean peninsula may explain the relative dearth of consumer commodities in Seoul as compared to the southern end of the peninsula. In addition to meeting the needs of its large permanent urban population, Seoul was still receiving refugees and repatriates from the northern zone as well as China. Pusan was also receiving refugees and repatriates, but they were being loaded onto ships and sent across the strait as soon as transportation was available. Pusan may also have had more commodities available because of its proximity to the major agricultural production areas in southern Korea. While many studies of the immediate post-Liberation period have focused on conditions in Seoul, it may also be worthwhile to consider the regional variations that could provide a broader understanding of conditions across the peninsula as a whole.

While the Korean War casts a long shadow back in time to the Liberation and beyond, the macro-level focus on the politics and Cold War tensions of the time have obscured the individual stories that constituted everyday life within this period. With the collapse of the Japanese empire, the Japanese settlers in Korea and the Koreans in Japan decided for themselves whether to stay or go and began to determine their own identity within a post-empire nation-state system. The push and pull factors encompassed the quotidian acts of both Japanese and Koreans and Korean retribution toward Japanese settlers was certainly one factor in motivating many Japanese to make the repatriation journey.

Although the collective memory of repatriation for the Japanese focuses on the hardships and victimization they experienced during their return, the Japanese themselves were determined to protect themselves and their property by all possible means. The formation of the relief societies and the initial belief that the Japanese would be allowed to stay in Korea, or at least keep their property, indicated the sense of permanence that the Japanese had about their presence in Korea. However, they were disabused, first by their expulsion and second, by the ignominious distribution of their treasured belongings as souvenirs for US soldiers. Despite both humiliations however, the Japanese perhaps had the last laugh as they initiated a deliberate and organized effort to evade the surveillance and controls intended to prevent colonial profiteering through secret ship smuggling.

While the nature of smuggling precludes the possibility of precise measurement, the available evidence suggests its widespread and persistent nature. Although the repatriation journey was a one-way ticket for both the Koreans and the Japanese returnees, the opportunities for smuggling to piggyback upon, and eventually overtake, the repatriation process was an important phenomenon in restoring the economic relationships that were broken with the collapse of the regional East Asian imperial economy. Whether conducted on an individual or collective basis, smuggling was a vital economic activity that continued to link Korea and Japan in the postwar era.

Beyond basic commodities however, one of the most critical items of the new transnational trade was currency. The acceptance and protection of the colonial financial institutions by the nascent Korean government and the US occupation authorities ensured the continuity of the personnel and the practices of colonial finance into the post-Liberation era. Although the US intended to separate the Japanese and Korean economies through regulation of currency exchange and transport, the ingenuity and persistence of the Koreans and the Japanese ensured that a healthy cross-strait trade in the currency was maintained through the end of the repatriation process. The largely unidirectional flow of currency indicates that the Japanese were quite successful in evading the economic controls of the US occupation. At the same time, Koreans involved in the currency trade were able to profit from the discounted exchange rates and the reverse repatriation of the Koreans in Japan.

The everyday lived experiences of the Japanese and the Koreans opens new possibilities for understanding the post-Liberation period beyond the Cold War politics that dominate the narratives of the time. The small glimpses of life afforded by the extant records indicate both the extreme chaos and the unstable identities that characterized the existence of the Japanese settlers and the Korean populace. Consequently, it is difficult to accurately portray the full complexity of the period since the actors themselves were buffeted by conditions and circumstances beyond their control. However, the decisions that they made and the actions that they took demonstrate the diverse array of motivations behind their existence as they stood at the transition between the empire and the nation.