NISEI AND ISSEI
Chapter 4: Economic Loss
Exclusion from the West Coast imposed very substantial economic losses on the Nikkei. The complete picture of those losses is a mosaic of thousands of personal histories of individual families. Owners and operators of farms and businesses either sold their income-producing assets under distress-sale circumstances on very short notice or attempted, with or without government help, to place their property in the custody of people remaining on the Coast. The effectiveness of these measures varied greatly in protecting evacuees economic interests. Homes had to be sold or left without the personal attention that owners would devote to them. Businesses lost their good will, their reputation, their customers. Professionals had their careers disrupted. Not only did many suffer major losses during evacuation, but their economic circumstances deteriorated further while they were in camp. The years of exclusion were frequently punctuated by financial troubles: trying to look after property without being on the scene when difficulties arose; lacking a source of income to meet tax, mortgage and insurance payments. Goods were lost or stolen. Income and earning capacity were reduced to almost nothing during the long detention in relocation centers, and after the war life had to be started anew on meager resources. War disrupted the economic well-being of thousands of Americans, but the distinct situation of the Nikkeiunable to rely on family or, often, on close friends to tend their affairsinvolved demonstrably greater hardship, anxiety and loss than other Americans suffered. Forty years after the events, a detailed reckoning of Nikkei losses and suffering is difficult, as the postwar effort to calculate these losses and to make partial recompense for them shows.
In 1948 Congress passed the Japanese-American Evacuation Claims Act  which gave persons of Japanese ancestry the right to claim from the government "damage to or loss of real or personal property," not compensated by insurance, which occurred as "a reasonable and natural consequence of the evacuation or exclusion."  The Act was amended over the years but remained the central vehicle by which the federal government attempted to compensate for the economic losses due to exclusion and evacuation. There were many kinds of injury the Evacuation Claims Act made no attempt to compensate: the stigma placed on people who fell under the evacuation and relocation orders; the deprivation of liberty suffered during detention in the assembly and relocation centers; the psychological impact of evacuation and relocation; the loss of earnings or profits; physical injury or death during detention; and losses from resettlement outside the camps. The legislative history reflects that such claims were considered too speculative. 
Twenty-six thousand, five hundred sixty-eight claims totaling $148 million were filed under the Act; the total amount distributed by the government was approximately $37 million.  It is difficult to estimate the extent of property losses which were not fully compensated under the Evacuation Claims Act, for the evidence is suggestive rather than comprehensive or complete.
First, by the time the claims were adjudicated, most of the essential financial records from the time of the evacuation were no longer available. When the Evacuation Claims Act was set in motion in 1948, the Department of Justice discovered that the Internal Revenue Service had already destroyed most of the 1939 to 1942 income tax returns of evacueesthe most comprehensive set of federal financial records.  Nor was the situation better among the evacuees themselves. The Japanese American Citizens League emphasized this problem in testifying in favor of amending the Evacuation Claims Act in 1954:
Thus the best evidence of economic losses no longer existed by 1954. The passage of another twenty-eight years, coupled with the deaths of many Issei and witnesses, has only added to the difficulty.
One study of property and income losses due to evacuation was done shortly after World War II, Broom and Riemer's Removal and Return. It focused on Los Angeles and the authors estimated that each evacuated adult had a median property loss of $1,000 and an income loss of $2,500 which would have resulted in approximately $77 million in claims payments under the Evacuation Claims Act, rather than the approximately $37 million actually paid. The Broom and Riemer estimates are conservative. Replacement costs of 1941 were used to estimate personal property losses. Estimates of real property losses were not presented separately and it is not clear how they were calculated. In addition, Broom and Riemer did not distinguish between income losses imputable to property and that part of income imputable to labor and management components.  In 1954 the JACL characterized this study as authoritative to the Congressional subcommittee considering amendments to the Act  and it is certainly the most thorough analytical work that is even roughly contemporaneous with the evacuation.
A second suggestive study by Lon Hatamiya, "The Economic Effects of the Second World War Upon Japanese Americans in California," relies on Broom and Reimer's work but develops other data in analyzing the income of the ethnic Japanese in California. Hatamiya points out that Broom was already dealing with recollections which were five years old and that the study was limited to Los Angeles, but his analysis supports Broom on income figures and thus suggests the general soundness of Broom's property loss figures. Hatamiya estimates the 1940 median annual income of Japanese (alien and citizen) at $622.  Broom had estimated the mean as $671-694.  Hatamiya argues that since median figures are often less than mean figures, there is no major discrepancy between these numbers. Hatamiya does not attempt to estimate property losses directly.
For years, writers and commentators have cited an estimate by the Federal Reserve Bank of San Francisco that evacuee property losses ran to $400 million.  The Commission has inquired of the Federal Reserve, which can find no basis in its records for such an estimate, and the Commission can identify no known source for the number. In short, the $400-million figure appears to be unsubstantiated.
Consideration of how claims were disposed of under the Evacuation Claims Act allows one to judge further the fairness of its results. The program moved very slowly in its first years, when the Attorney General was required to adjudicate each claim presented to him. In 1949 and 1950, only 232 claims were adjudicated out of more than 26,000 filed.  In 1951 the formal adjudication requirement was removed from the Act for claims settled for the lesser of $2,500 or 75% of their value.  A rush of settlements followed: by the end of 1955 approximately 22,000 claims had been settled.  These limitations must have operated as a forceful incentive to reduce claims in order to get a quick resolution and cash payment. In 1956, with a small number of large claims remaining (approximately 2,000 claims for $55 million), the Act was again changed to allow the Attorney General to settle for up to $100,000 and to permit contested cases to go to the Court of Claims. Thereafter, almost all claims were compromised and settledonly 15 cases were taken to the Court of Claims. 
Regardless of the low level of litigation, the settlement procedure was tilted in favor of the government. It was not until 1956 that the Act was amended to provide for appeal past the Attorney General to the Court of Claims.  Before 1956, decisions of the Attorney General were final and, in approaching settlement, the Justice Department's attitude, not surprisingly, balanced protecting the interests of the United States with trying to give claimants such liberality as the Act provided.  In practice, the Department tried to reach the same result trial might have produced.  "Where the problem is created by failure to supply information, the amount should be on the low side."  Moreover, no matter was too small for careful consideration by Justice Department officers, and the rulings were published in a volume of "Precedent Decisions" to guide all future similar cases. For instance, a $7.50 claim for Japanese phonograph records destroyed by the claimant because it was rumored that anyone with Japanese records would be arrested, was not allowed since the loss did not spring from the evacuation but was caused by "the general hysteria among an alien people arising out of the state of war;"  but a $3.00 claim for the cost of advertising a car for sale at the time of evacuation was thoroughly reviewed and allowed.  Thus the difficulty of providing persuasive evidence of claimants' losses, the evidentiary standards followed by the Justice Department and a compromise authority which encouraged the reduction of many claims, would tend to result in settlements well below the actual value of losses.  Recently released from camps, struggling to survive and to reestablish their lives, the claimants badly needed financial resources to sustain themselves; this too played a part.
One cannot readily appraise how much below truly fair compensation were settlements under the Act, but evacuees' testimony before the Commission drew a picture of economic hardship and suffering that could not be fairly compensated by an amount close to $37 million.
Evacuees repeatedly pointed out that they had had little time in which to settle their affairs:
Testimony emphasized that the governmental safeguards were never entirely successful; they began late, and information about the programs was never widely disseminated among evacuees; the evacuees also distrusted even a quasi-governmental body. The protection and management of the property and personalty many evacuees left behind was inadequate. Businessmen were forced to dispose of their inventory and business at distress prices. It was difficult for evacuees to get reasonable prices in a hostile marketplace. Individuals sold their personal belongings in a buyer's market, realizing only a fraction of their worth.
The makeshift warehouses which evacuees usedhomes, garages and other structureswere vandalized; the goods frequently stolen or destroyed. Often those who had agreed to serve as caretakers for the evacuees' property mulcted them in various ways. Some who had found tenants for their property discovered, to their sorrow and financial loss, that the promised rent never appeared or that tenants did not continue the previous land use; many disposed of evacuees property as their own, or simply abandoned it.
The evacuees' losses mounted as their exclusion from the West Coast lengthened. Some evacuees became aware of the destruction of their property while they were still in relocation centers; others only discovered the full extent of their losses upon their return home. The loss of time, of potential and of property were to many of the evacuees irreparable blowsfinancial blows from which many never wholly recovered.
The greatest impact of the mass exclusion and evacuation was felt in agriculture, where the Nikkei's economic contribution was concentrated. In 1940, 45% of those gainfully employed among the 112,353 persons of Japanese descent living in the three Pacific Coastal states were engaged in growing crops. Another 18% were employed in wholesaling, retailing, and transporting food products. Census figures show that nearly two-thirds of the work force directly depended upon agriculture and that in the three West Coast states, the value of the 6,118 farms operated by Nikkei was $72,600,000 with an estimated $6 million worth of equipment in use. 
These farms represented 2.2% of the number and value of all farms in the three West Coast states, but only .4% of all land in farms, and 1.5% of all crop land harvested. The average farm was roughly 42 acres; 84% were in California.  These figures give a misleading indication of the importance of Nikkei farming. The average value per acre of all farms in 1940 was $37.94; that of Nikkei farms was $279.96. Three out of every four acres of evacuee farm land were under cultivation, while only one out of every four acres of total farm land was planted in crops.  Fruit, truck and specialty crops predominated. Much of their acreage was planted and harvested two or more times a year.  In California the Nikkei dominated the wholesale and retail distribution of fruits and vegetables. In Los Angeles County $16 million of the annual $25 million flower market business was in Nikkei hands. 
When the Japanese arrived in the United States they were at the bottom of the economic ladder. Gradually they saved money and were able to rent or indirectly purchase cheap land. By working hard, living frugally and with family cooperation, they were able to increase their acreage. The impact of evacuation is made more poignant by the fact that it cut short the life and strength of the immigrants, frequently destroying the fruit of years of effort to overcome grindingly adverse Depression conditions. Mary Tsukamoto described the yearly economic cycle many farmers followed, especially those around Florin, California:
Others also spoke of just beginning to recover from the effects of the Depression at the time they were forced to leave the West Coast. The west's expanding economy had enabled many to purchase new equipment or lease additional land and, in general, to raise their standard of living. Henry Sakai's father had been a successful businessman:
Clarence Nishizu told of the gains his father and family had made after the Depression in which:
One evacuee had followed in his father's footsteps as a commercial fisherman working the coastal waters off Monterey. He described their struggle to keep their boat:
For many evacuees the most immediate, painful loss was their profit from what promised to be a bumper crop in 1942. The parents of Jack Fujimoto lost the proceeds from an abundant crop of cucumbers and berries which they were unable to harvest before evacuation in May. Instead, the caretaker benefitted from the hard work of this couple who had tilled the soil without much success until then. The Fujimotos never heard from the caretaker. 
Hiroshi Kamei recounted:
Another described how he had worked on his farm until he was evacuated, but his crop had been harvested by strangers and he himself received no return for his labor and time. 
The white growers and shippers who expanded in the wake of the evacuation did very well in 1942. The managing secretary of the Western Growers Protective Association summed up matters at the end of the year:
For many families who owned nurseries, evacuation occurred near one of the richest days in the flower businessMother's Day, which accounts for one-fifth of the annual sale of flowers. With the Mother's Day crop about to be harvested, evacuation upon short notice caused obvious financial hardship:
Many evacuees who had been in the flower and nursery business told similar stories. Heizo Oshima described the voluntary evacuation of one community of Japanese families in floriculture around Richmond, El Cerrito and San Pablo:
The Nisei children left in charge of the nurseries were untrained and unaccustomed to handling financial details of the family business. They were at a distinct disadvantage when they had to sell in a market of rock bottom prices. Mary Ishizuka told of the heavy loss suffered by her father, who in 1942 had one of the largest nurseries in southern California:
The loss of hard-earned farm machinery was also very bitter; a Los Angeles witness told his family's story:
The exclusion and evacuation seriously disrupted the agricultural economy of California and led the government to exhort those suspected of disloyalty to produce food for war needs until the final moment when they were thrown off their land. The Secretary of Agriculture had established farm production goals for 1942, and the Japanese farmers of California had been expected to produce over 40% of all truck crops.  It was sufficiently critical to the government that the evacuees produce as much as possible, that continued crop production became a measure of loyalty.  Tom C. Clark, Chief of the Civilian Staff, Western Defense Command, declared on March 10, 1942:
Three days later Clark was no longer equating crop production with evacuee loyalty. Crop neglect or damage had been elevated to an act of sabotage:
Witnesses recalled the government's insistence that they continue to farm (with evacuation imminent) or be charged with sabotage:
Shigeo Wakamatsu told how the Issei truck farmers of the Puyallup Valley in Washington responded to the regulation to continue crop production:
Next to agriculture, major occupations of evacuees were in small shops and businesses. Shops, hotels, restaurants and other service-oriented businesses were common. Witnesses told how they were forced by circumstances to accept low prices or abandon property or, with a mixture of desperation and hope, to place the property in insecure storage.
Seattle evacuees had two hundred hotels which were typically run as family enterprises.  Shokichi Tokita's father had purchased a hotel in a prime downtown Seattle location after his health had been threatened by his original profession as a sign painter. As a painter the elder Tokita had been acclaimed by the Seattle Art Museum as one of the ten best artists in the Pacific Northwest. He made an equal success of his hotel:
One evacuee with extensive property holdings was forced to sell his forty-five room hotel for $2,500 to a buyer who was able to make only a $500 down payment; the balance was sent to the evacuee in camp two months later. The hotel owner's loss was accentuated by the fact that he was denied the profits which would have accrued to him in a defense boom town such as Seattle became during World War II. 
A former interviewer with the U.S. Employment Service who had been assigned to the Federal Reserve Bank cited a number of loss cases; one woman had owned a twenty-six room hotel:
Other instances of women who had built up businesses and lost the fruit of years of labor were described. Widowed at age 32 with four young children to raise, one had used the proceeds of her deceased husband's insurance policy to buy a hotel in Stockton, California. Her son testified:
She had purchased the hotel for $8,000; it had been a home for her and her children. Now it was gone.
One Issei woman described taking over her husband's insurance business after he was confined to a tuberculosis sanitarium. She built up the business to the point where she had an average monthly income of $300 to $400 to support herself and her children. She found herself, her family and her northern California clients torn from their homes. Many of her clients had no way to continue paying their policy premiums, nor could she effectively service their policies. 
The owner of an Oakland Oriental art and dry goods store was unable to dispose of his merchandise in the few weeks given him prior to his evacuation. No one wanted to purchase "Japanese products." He had to store an inventory worth more than $50,000 in a Japanese Methodist Church which had been converted into a warehouse. 
The Yoshida family, owners and operators of the Western Goldfish Hatchery and Western Aquarium Manufacturing Company, gave away their goldfish because they required constant care and feeding. Unable to find someone to purchase the goldfish within the three weeks before their evacuation, the Yoshidas had no other recourse. The hatchery comprised six large fish hatching ponds on an acre of land; they stored the aquarium inventory and personal property in the business sales office. 
Anti-Japanese sentiment caused financial problems for the owners of many stores and restaurants. For example, at the Sukiyaki Restaurant in Salem, Oregon, FBI visits heightened anti-Japanese feeling. Vandals struck the restaurant and customers ceased to patronize it, afraid of being viewed as unpatriotic.  In short, the small businessman fared no better than the farmer.
The smaller numbers of salaried workers and professionals also testified eloquently to the economic impact of evacuation; their losses were less tangible, but no less real than those of farmers and entrepreneurs. Doctors, dentists and architects lost their homes, their practices, their equipment and a lucrative period of their careers. 
Many businessmen and professionals couldn't collect outstanding accounts and lost their accumulated charge account receipts.  Mrs. Mutsu Homma gave an example of the financial predicament of many evacuee professionals:
The salaried worker in some instances found that the curfew restricted his movements and prevented him from doing his job, or else he lost his chance for economic advancement. 
Cars and trucks were in demand during the evacuation period by both the Army and the civilian population of the West Coast. In this post-Depression period of a growing economy the automobile was a proud symbol of economic advancement. The auto's importance to the way of life and economic well-being of evacuees can be seen in the frequency and detail of car sales described by witnesses:
Evacuees were permitted to dispose of their vehicles by private sale. The other option was to place the cars in government storage, but the deterioration likely to result from long-term storage encouraged evacuees to sell. General DeWitt's Final Report states that the majority of cars in storage were "voluntarily" sold to the Army. 
Cars driven to the assembly centers were automatically placed in the custody of the Federal Reserve Bank. The vehicles were then valued by two disinterested appraisers and the possibility of resale to the Army or the civilian sector was considered. Those which qualified for Army purchase were quickly bought up by the government. The new 1942 models were sold only to auto dealers, so they would have stock; factories were being converted to wartime production.
Originally 1,905 vehicles were placed in the custody of the Federal Reserve Bank; 1,469 were voluntarily sold to the Army and 319 were released according to evacuee instructions. The remaining 117 remained in storage under Bank control.
In late fall 1942, the joint military authorities decided to requisition these vehicles "in consideration of national interest during war time, and in the interests of the evacuees themselves."  Justifying this move, General DeWitt explained that only those vehicles in open storage whose owners had refused to sell were requisitioned. 
It came to the attention of the Tolan Committee early in its West Coast hearings that frightened, bewildered Japanese were being preyed upon by second-hand dealers and real estate profiteers. On February 28, the Committee cabled Attorney General Biddle recommending that an Alien Property Custodian be appointed. 
Before any such action was taken, however, evacuation was under way. Spot prohibited zones had been cleared of Japanese by order of the Department of Justice; the Navy had evacuated Terminal Island; and the Western Defense Command had urged a number of West Coast residents of Japanese ancestry to leave the military area voluntarily. Whatever their good intentions, the military's primary concern was to remove evacuees from the designated areas, not to look after their property.
In early March, the Federal Reserve Bank of San Francisco was given responsibility for handling the urban property problems of the evacuees; an Alien Property Custodian was appointed on March 11; and on March 15 the Farm Security Administration assumed responsibility for assisting with farm problems. Each agency retained its obligation until the WRA assumed total responsibility in August 1942.  By this time, many abuses had already been committed. The Tolan Committee gave a succinct example of what it discovered was going on:
Property and business losses also arose from confusion among government agencies. The military's delay in providing reasonable and adequate property protection and its failure to provide warehouses or other secure structures contributed to initial evacuee losses. Confusion existed among the Federal Reserve Bank of San Francisco, the Farm Security Administration and the Office of the Alien Property Custodian. Not only did each agency have different policies; there was also confusion within each about how to implement its program. Dillon S. Myer decried the result:
In general people were encouraged to take care of their own goods and their own affairs.  Given the immense difficulties of protecting the diverse economic interests of 100,000 people, it is not surprising that despite the government's offer of aid it relied primarily on the evacuees to care for their own interests. Conversely, it is not surprising that, facing the distrust expressed in the government's exclusion policy, most evacuees wanted to do what they could for themselves. Approximately 11% of their farms were transferred to non-Japanese (there was a transfer of 3% to ethnic Japanese, probably the result of settlement of business affairs in anticipation of exclusion). 
Evacuees were vulnerable to opportunists. Droves of people came to purchase goods and to take advantage of the availability of household furnishings, farm equipment, autos and merchandise at bargain prices.
The evacuees were angered by the response of their former friends and neighbors; some attempted to strike back however they could. Joe Yamamoto vented his feelings by
Another evacuee related how he tried to destroy his house when he abandoned his property and his business after evacuation notices were posted on February 19, 1942:
The evacuees were unprotected and vulnerable. The prevalent use of oral contracts created difficulties for many. The practice of regarding a person's word as binding, a carryover from Meiji Japan reinforced by dealing primarily within their own ethnic group, made it difficult for many evacuees to document when, where, how and to what extent financial loss occurred. Their verbal agreements with caretakers frequently brought theft, fraud or misappropriation.
Kimiyo Okamoto followed the prevalent practice of evacuees in all walks of life and entrusted his property to a friend:
Another Seattle witness asked Caucasian friends to take over the property and financial management of their apartment house. Unfortunately, they returned from camp to discover the property faced foreclosure due to three years' tax arrearage. 
The daughter of concessionaires at Venice and Ocean Park Piers and small carnivals throughout California spoke of the problems created by FBI detention of her father. In desperation, her mother gave the carnival equipmenttruck, trailer, gamesto one employee and turned over the beach concessions to another who had agreed to act as caretaker until the evacuees returned. When the family did return, neither the business nor the employee could be found. 
When the part-owner of a movie business was picked up by the FBI, his business was hurriedly entrusted to the man who had handled his business insurance. The eager caretaker visited the owners while they were in camp to secure power-of-attorney from them so he could handle corporate affairs. Having gained power-of-attorney, the caretaker moved to gain corporate ownership on the basis that all Japanese members of the corporation were "enemy aliens." 
In sum, economic losses from the evacuation were substantial, and they touched every group of Nikkei. The loss of liberty and the stigma of the accusation of disloyalty may leave more lasting scars, but the loss of worldly goods and livelihood imposed immediate hardships that anyone can comprehend. Moreover, it was the loss of so much one had worked for, the accumulated substance of a lifetimegone just when the future seemed most bleak and threatening.