MITI and the Japanese miracle

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eliminate the last traces of realism in the price structure and reinforce tendencies toward budgeting in terms of commodities and barter deals. It also led to the black markets and black prices that persisted throughout the Pacific War.

Third, Japan's poorly informed diplomacy had led to the unpleasant surprise of the Molotov-Ribbentrop agreement. Since the Japanese had thought that they were allied with Germany against Soviet Russia, this inexplicable turn of events led the government to resign. Two days before the outbreak of war in Europe a new cabinet was formed. Godo * Takuo (18771956)a doctor of engineering, a former ordnance vice admiral, a recent head of the Showa* steel works in Manchuria, a connection of the Asano zaibatsu through the marriage of his daughter, and a supporter of medium and smaller enterprises as an active director of the industrial unions associationbecame minister of both agriculture and commerce. Godo first told Murase that he wanted him to remain as vice-minister, but less than a month later he shamefacedly had to say that the army had asked for Murase's resignation in order to bring back Kishi from Manchuria. The problems of the bogged-down war in China, the need for industrial expansion, and the rapidly changing world scene had combined to generate a clamor inside and outside the ministry for the return of the Manchurians. Tojo* was already serving as vice-minister of the army, and Hoshino and Matsuoka did not come back until the following year. But Kishi paid quick heed to the call and became vice-minister of MCI on October 19, 1939.

Kishi had to proceed cautiously. He was one of the best-known reform bureaucrats, and the business community was still determined to keep MCI under its own control. Its method was to withhold support of the government unless a business figure were named MCI minister. In January 1940, following another change of cabinet, the business community replaced the technocratic Admiral Godo with a real businessman, Fujihara Ginjiro*; and seven months later, when the Manchurians really began to take over the second Konoe government (Tojo as army minister, Hoshino as CPB president, and Matsuoka as foreign minister), the business leaders asked for and got Kobayashi Ichizo* (18731957).

Kobayashi was the founder of the Hanshin Electric Railroad Company (the Osaka to Kobe express), the Takarazuka girls operatic troupe, the Takarazuka and Nichigeki theaters in Tokyo, the Toho* Motion Picture Company, and many other enterprises. After the war he served in the Shidehara cabinet as a planner of economic recon-