JAPAN STRIKES AT INDUSTRIAL FEUDALISM
Kawakami, K. K.
Japan Strikes At Industrial Feudalism By K. K. KAWAKAMI THE word zaibatsu, coined by Japanese writers of liberal tendencies in describing the "big business" of their country, has become universal....
...There will be 64,150,000 voters in place of the 12,527,000 now privileged to vote...
...On the eve of the war the Mitsui bought up all available rice in Korea and Formosa and sold it to the army...
...The Government even asked the Mitsui to issue convertible paper currency amounting to nine million yen...
...It will, let us hope, demand a voice in the revision of the Constitution itself now being, undertaken by Prince Knoye...
...Throughout the "duration" they were the Government's purchasing agents for English coals, Australian horses, and arms and ammunitions from various countries...
...THE Russo-Japanese war of 1904-5 gave the Mitsui an opportunity to replenish their depleted coffers...
...Naturally not only Japan's foreign trade but her domestic commerce as well was monopolized by Europeans and Americans...
...The dissolution of the zaibatsu will put an end to the illicit relations long existing between them and the political parties...
...The new liberals should repudiate the old idea of "granted constitution"—meaning that the Constitution is a gift of the Emperor—and demand that it be the expression of the popular will...
...Gen...
...Under Gen...
...They met not in Government offices but in a secret tryst at an exclusive restaurant owned by a notorious demi monde who had friends in high places...
...Now, on the eve of drastic action by Gen...
...Then Minister of the Army, Yamagata conferred many privileges upon the Mitsui in connection with the purchases and expenditures under his jurisdiction...
...Of this sum Iwasaki received five per cent or 200,000 yen as the purchasing agent's commission...
...Iwasaki...
...All these deals took place some 18 years before the inauguration of parliamentary government under which such deals would have been impossible...
...When the Mitsui Bank was organized in 1874 it was at once appointed the depository of Government funds totalling some 10 million yen...
...MacArthur, the combined assets of the 11 Mitsui families and of the partnerships and corporations directly or indirectly controlled by them are estimated at three billion yen...
...The Mitsui, burdened with, a guilty conscience, dared not lift a finger at the accusing newspaper...
...Chief among such-enterprises were a fish torpedo factory and shipyard at Kobe, an airplane factory at Nagoya, a drydock at Yokohama, and a machine factory in Tokyo...
...These funds the Bank employed in many profitable ways and without payment of interest...
...When the Shogunate was replaced by the imperial regime in 1868, the Mitsui became the chief financial support of the new Government which had almost no money...
...Unlike the Mitsubishi, however, the Mitsui are not very deeply involved in war industries...
...All this was highly profitable, and placed the Mitsui upon a secure foundation...
...MEANWHILE, the Minister of Commerce and Industry has stated that he is drafting an antitrust law similar to the Clayton Act...
...From that time until his death Inouye, who had many proteges and adherents within the Government, was the Mitsui s good angel, while Yamagata, firmly entrenched in the Army, continued to help the -house in many subtle ways...
...The Supreme Allied Commander will have rendered Japan a signal service if his investigation results in the clipping of the grasping hands spread out by her industrial and financial octopuses whose monopolistic policy has all but destroyed the initiative and enterprise of her small manufacturers and traders...
...This was a body blow to the Mitsui, but General Yamagata again came to the rescue...
...Unlike the Mitsubishi the Mitsui are not upstarts but a house almost three centuries old...
...One of the immediate results of this crusade was the withdrawal from the Mitsui Bank all the funds of the Japanese Red Cross amounting to two million yen, which caused a general run on the Bank...
...The most notorious example of sudden wealth created by this policy is the rise of the house of Mitsubishi (Three Water-Chestnuts), so called after the shape of its insignia...
...Its original business was the operation of several dry goods stores in Yedo (Tokyo) and a few other cities...
...No doubt a considerable number of Socialists and Communists will be elected...
...Premier Baron Shidehara is an honest man, but he is handicapped by his marriage to the daughter of the late Yataro Iwasaki, founder of the Mitsubishi House...
...Both did become a reality in due course and because of this contribution the scandal has been forgotten...
...Though an impoverished samurai, he had friends in high places because his native province, Tosa, was one of the four which were largely instrumental in the inauguration of the new regime...
...Upon the pretext of international necessity, the Government practiced economic favoritism, winked at "malefactors of wealth," and pursued a course which made the rich richer, usually at the expense of the poor...
...In a frantic effort to solve this problem the Government employed many foreign experts, and with their assistance launched various industrial and mercantile enterprises on its own account...
...The Mitsui have further announced that they will sell to the public shares heretofore monopolized by them...
...THUS began the history not only of the Nippon Yusen Kaisha, which later became one of the world's greatest shipping companies but of the House of the Mitsubishi, financial and industrial giant, second only to the Mitsui...
...In 1901 the Mitsui was faced with another crisis due to a crusade launched against it by the newspaper, the Niroku...
...THE good old days came to a sudden end in 1886 when at long last laws were promulgated for the accounting and auditing of government funds, and the Bank of Japan superseded the Mitsui Bank as the depository of official funds...
...In fact there is hardly any branch of business in which the Mitsui is not interested...
...Conceivably these men may find it difficult, in spite of themselves, to turn a deaf ear to the importunities and cajoleries pressed upon them by their relatives and friends high in the financial hierarchy...
...Douglas MacArthur's recent directive, instituting an inquiry into the ramifications of the zaibatsu, and ordering the break-up of family monopolies, has intensified public interest in the matter...
...During the Formosa campaign Iwasaki got himself appointed to operate those 13 ships as military transports...
...These hold much of the remaining 40 per cent...
...But the odorous deal did not end there...
...For this service the Government paid Iwasaki generously, while Iwasaki paid the Government nothing for the use of the ships...
...Such favors could not be extended to Yamagata alone without inviting demands for similar favors from other high officials...
...THAT was only the beginning of the story...
...These should not be penalized for the sins in which they have no part...
...It greets one's eyes in the daily press, in magazines, in books in many languages...
...When the Formosa campaign ended, Iwasaki got all the 13 ships transferred to his ownership without paying a cent for them—ships for which the Government had paid four million yen of the people's money...
...As the Mitsubishi's "good" angel was Okuma, so the Mitsui's was General (later Marshal and Prince) Ari-tomo Oyama, father of Japan's modern army...
...According to one estimate Japan's entire corporate capital amounts to some 22 billion yen, of which 20 per cent is held by the Mitsui alone, and 60 per cent by four houses—Mitsui, Mitsubishi, Yasuda, and Sumitomo...
...Perhaps the present Cabinet is not in a position to deal vigorously with the zaibatsu...
...As the Mitsubishi were linked with the Kenseito Party, so the Mitsui had close relations with the Seiyukai Party, originally the Jiyuto Party...
...There are a dozen or so lesser houses, chief among which are Konoike, Furukawa, Asano, Okura, Kawasaki and Nomura...
...This was the greatest but by no means the only favor the Mitsui received from the Government...
...Their enterprises include banking, insurance, trading, mining, steel mills, warehousing, electrical and chemical industries, rayon and cotton mills, sugar refineries, paper mills, railways, machinery...
...MacArthur's prodding the three largest zaibatsu—Mitsui, Mitsubishi and Sumitomo—have signified their intention of dissolving their family-owned corporations...
...Okuma's apologists explain that he accepted the money from Iwasaki not for selfish purposes but with a view to financing the political party and the school of liberal thought which he had been planning to establish...
...MacArthur and his economic staff to formulate their own plan for the guidance of the zaibatsu in the process of their dissolution...
...It should be empowered to hold public hearings to ferret out all sinister secret dealings...
...The founder of this financial house is Yataro Iwasaki...
...Finance Minister Viscount Shibusawa is also a man of undoubted probity, but he is on friendly terms with financial houses, being the grandson of the late Viscount Eiichi Shibusawa, an enlightened, public-spirited man but a financier...
...Even the old-line conservatives will be much more liberal than they have ever been...
...Then Japan was a century behind Europe and America in industry and commerce...
...Whatever the extenuating circumstances, a scandal is a scandal, and, besides, Okuma's political party (originally Kaishinto, later Kenseito, now Minseito) maintained even after his death, close relations with the House of Mitsui, exchanging favors with each other...
...Instead, it was permitted to linger even after Japanese industry had definitely emerged from a state of infancy...
...But the "public" is impoverished and is in no position to buy the shares offered them...
...Back in 1874, the Government was preparing to send an armed expedition to Formosa because Japanese subjects shipwrecked off its coast had been murdered by its natives...
...There in a secluded room of her house Iwasaki, after many a tete-a-tete with each of the above named statesmen, clinched a deal by which he was commissioned to buy 13 old ships from the Pacific Mail at a total cost of four million yen...
...When the deal was clinched Iwasaki gave Finance Minister Okuma some 400,000 yen, equivalent to the price of two ships...
...This alone, of course, will not meet the demand the Supreme Allied Commander has in mind...
...When these were fairly established, the Government transferred them to private concerns often at nominal cost...
...This disproportionate concentration of wealth stems from the policy adopted by the Government itself at the beginning of the New Japan, some 30 years after Commodore Perry's advent in Yedo (Tokyo) Bay in 1853...
...He persuaded his close friend, Kaoru Inouye, who had served as Finance-Minister and Foreign Minister, to become the Mitsui's super-adviser and readjust its financial affairs...
...No doubt the common man of Japan welcomes this investigation...
...The legislature thus constituted will be disposed to respect the interest of the common man as its predecessor has never done...
...So he talked Okuma and Okubo into granting the steamship company an annual subsidy of 350,000 yen...
...His wife was the daughter of the first president of the Mitsui Bank...
...Who can guarantee that the shares may not be bought up by the rich, if not the zaibatsu themselves, possibly through dummies...
...Even so the Japanese Diet, for future safeguard, should assign to itself a role similar to that played by the U. S. Congress for the prevention of corrupt practices at elections and in politics in general...
...The culmination of the story was an account of how the Mitsui had cheated one Sankuro Mitani out of 53 large plots of land in the business centers of Tokyo, then worth many millions of yen, now almost priceless...
...In recent years, before Japan's surrender, the combined assets of six Mitsubishi families were estimated at 16 hundred million yen...
...For three months, day after day, this Tokyo journal exposed the "moral turpitude" of some of the heads of the Mitsui families, and the ruthless methods by which they had amassed fabulous wealth...
...Far greater than the Mitsubishi in power and financial resources is the House of the Mitsui...
...In return the Mitsui were understood to have built Yamagata's Tokyo residence and his seaside villa...
...Home Minister Okubo, a comparatively "honest" man, was content with 100,000 yen, the price of half a ship...
...HOW to reverse this condition was the first question which confronted the New Japan...
...ONE sees a ray of hope in the general elections to be held early next year under the new election law extending the suffrage to women and lowering the voting age of male voters from 25 to 20...
...This policy, an evil, if necessary, expedient, should have been abandoned at the earliest possible moment...
...In time financing the Toku-gawa Shogunate, the central military government and feudal barons, became its chief business...
...As a result Japan became an important factor in international commerce, but internally the same policy called into being social ills crying for reform these many years...
...having secured the 13 ships for a song, proposed to open a regular coastal service as well as a service to Korea and China...
...These assets were mobilized to operate, either directly or indirectly, some 50 companies including shipbuilding, steel mills, trading, insurance, banking, coal mining, shipping, sugar refineries, airplane factories, and electrical machinery...
...Further, the Government underwrote or subsidized enterprises undertaken by private capital...
...Iwasaki, who had been engaged in shipping business in a small way, sensed the possibilities of the situation and suggested that the Government purchase the ships for the expedition from the Pacific Mail Steamship Company of San Francisco and make him the purchasing agent...
...He considered this a public-spirited enterprise with no immediate prospect of profit...
...It may be necessary for Gen...
...Any plan to be just and fair must include a safeguard for the interest of a large number of bona fide investors who converted their life-time savings into a few shares of various corporations controlled by the zaibatsu...
...The long and short of it was that they signed a "peace treaty" with the paper promising (1) to adopt a constitution regulating the affairs of the Mitsui families, (2) to consult the publisher of the newspaper on the drafting of the constitution, (3) to cleanse the Mitsui Club, excluding geisha girls from it, (4) to compensate Mitani for the property they had misappropriated, (5) to contribute funds to undertakings for social welfare...
...So in the 20 or so years following the establishment of the Mitsui's close connections with the new Government, they had to make "loans" to various bigwigs of the official hierarchy amounting to a few million yen...
...It described the Mitsui Club as a "den of demons" where geisha girls were called in not only 'for the pleasure of Mitsui potentates but to satisfy the whims of high officials and public men whose influence they hoped to exploit...
...Of all zaibatsu the Mitsubishi were most deeply involved in war industries subsidized by the Army and the Navy...
...To put this proposal through, Iwasaki held many secret meetings with Toshimichi Okubo, Home Minister, and Shigenobu Okuma, Finance Minister, the two most influential statesmen at the time...
Vol. 9 • November 1945 • No. 47
