MITI and the Japanese miracle

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was MCI's first industry-specific bureaua pattern that the whole ministry would adopt in 1939and it was the first bureau of MCI to which military officers on active duty were seconded.

¹⁰

Meanwhile, during 1934 the first of two political events that were to lead to the creation of the economic general staff in its most fully developed form erupted on the political scene. This was the Teijin scandal that brought down the Saito* cabinet. The second incident was the military mutiny of February 1936 that dramatically increased military influence over the whole society. In January 1934, in a series of articles in his

Jiji

shimpo

* newspaper, the businessman and political polemicist Muto* Sanji charged that a group of ministers and higher officials were corruptly manipulating the stock of the Imperial Rayon Company (Teijin) for their own profit, and that Teijin shares held by the minister of finance since the bail out of the Taiwan Bank in 1927 had been secretly sold to them. It is unclear to this day whether Muto sincerely believed what he wrote or whether his charges were part of a militarist plot to discredit the political parties and their capitalist supporters. The effect of his charges is not, however, in dispute; they contributed strongly to the belief that civilian politicians were hopelessly corrupt.

¹¹

Muto himself was shot to death at North Kamakura station on March 9, 1934, by an unemployed worker. Two ministersNakajima of MCI and Hatoyama of educationalong with a former vice-minister of finance and top business leaders were arrested and subjected to a sensational public trial that lasted from June 1935 to October 1937. All were ultimately acquitted. Three prominent businessmen who were arrested went on to hold positions as ministers in postwar cabinets (Kawai Yoshinari in the first Yoshida cabinet, Nagano Mamoru in the second Kishi cabinet, and Mitsuchi Chuzo* in the Shidehara cabinet).

The role of Yoshino Shinji in the Teijin case deserves mention here. The interesting point is that he never said a word about the case even though many of the defendants were his close personal and professional associatesNakajima as his minister and former TIRB colleague; Mitsuchi as a former counselor of the old MAC; Kawai as a former MAC bureaucrat (he resigned at the time of the rice riots); and Nagano as a director of the Tokyo Rice Exchange. Moreover, although the disposition of shares of stock put up as collateral by the Bank of Taiwan was the responsibility of the Finance Ministry's bank inspectors, the supervision of the stock exchanges was still under the jurisdíction of MCI. Yoshino did not have to know directly about the disposition of Teijin shares, but the manipulation of prices on the Tokyo and Osaka stock exchanges had to be of interest to MCI.