The SCAP government carried out agricultural reforems. It passed the Farm Land Reform Law, under which lands were bought from the landlords, and soldto tenant peaseants at a cheap price. y 195, 90% of peasants in Japan had their own land. To increase production, the US also introduced new farming techniques, chemical fertilisers and insecticides to Japan.
The SCAP government kept the Meiji tradition and implemented compulsory education. The Basic Education Law of 1947 provided Japanese children with 9 years of compulsory eudcation, including 6 years of primary educationa dn 3 years of junior secondary education. This education policy rasied the eudcational standard of the Japanese people, and provided quality labour for various industries.
After WWII, Japan faced huge economic problems. The unemployment rate in Japan was high due to the return of a large number of soldiers. Many houses and factoies were destroyed. in 1945, rice production was only at 2/3 of the pre-war level. War damage accounted for 1/4 of the country's wealth.
During the SCAP period, Japanese economy was on the stage of recovery. In 1945, Japan's GNP per capita was only US$17. In 1950, it rose to US$132. In 1945, Japan's industrial production index was only 10. It rose to 55 in 1948 and 84 in 1950. In 1952, Japanese economy was totally recovered. In this period, Japan fouced on the production of coal, steel and cement in order to prepare for the development of other industries in the future.
The SCAP government passed the Deconcentration LAw to dissolve the zaibatsu, which once controlled Japanese economy. It helped to prevent monopoly and capital accumulation. Although the US stopped attacking the zaibatuse around 1650, its deconcentration policy had already succeeded in encouraging more investment and economic activities.
The US occupation created a stable poltical environment for Japan. The new constitution of 1947 changed Japan into a liberal and democractic country. In additioon, the government did not need to spend resources and time on military expansion, and thus could concentrate on econmic recovery.
To prevent economic turbulence, the US provided Japan with a large amount of loans and raw materials, such as oil cotton, iron ores and coke. In 1948, the SCAP government issued the "Nine Principle of Economic Stabilization" to help solve Japan's post war problems, such as inflation and financial crises of banks. To prevent inflation, the US also annouced the Dodge Plan in 1949, which dixed the exchange rate between the yen and the dollar at about 360 to 1.