maintain. It was therefore, difficult to oversee all the operational details of the needs of specific regions.
Unreasonable relationships of dependency had been deepened between city and sparsely populated rural districts as well as between passenger and cargo transportation organizations, that were harmful to management efficiency.
4 An Outline of the JNR Reform
The Japanese government, in 1987, in order to solve two problems, [(a)the public corporation system, and (b)the single nationsbank management system], determined to privately JNR and to break it up into seven JR companies (six passenger companies and one cargo company).
The definition of is given as "the conversion of a public corporation into a private company, and selling the stocks of the company on the market."
The problem in accomplishing this was just how to organize the seven new companies so that they would present a profitable future worth investing in.
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* The government lifted considerable regulations on JNR in order to make seven JR companies run their operations as freely as other private rail companies.
* The government worked out how to handle a huge amount of long-term debts of JNR smoothly.
1) Handling of Long-Term Debts
The government determined to place 2/3 of the debts on "the JNR Settlement Corporation" (newly established by the government), while placing the remaining 1/3 on the four JR companies out of seven.
The settlement corporation was made to try to sell its assets (the JR stocks and the land succeed from JNR which was not to be used by the JR companies in their railway operations) in order to get out of the long-term JNR debts. Whatever debts remains after the sale of these assets can only be covered by government tax income, and will finally be a burden of the nation.
