MITI and the Japanese miracle

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billion, but by 1919 this figure had grown to about ¥4.5 billion, excluding income from marine transportation and insurance premiums. During the period 191518 exports exceeded imports by about ¥1.3 billion, and the Bank of Japan used the profits from these years to pay off all of Japan's foreign debts, to purchase foreign bonds, and to increase the country's gold reserves. At the end of 1918 specie holdings reached ¥1.6 billion, about four times the figure for 1913. Some of Japan's established businessmen became rich overnight; Mitsui Trading Company, for example, reported paid-in capital of ¥20 million in February 1918, and of ¥100 million a year later.

¹⁵

Many new firms were established, known at the time as

senso

*

narikin

(wartime nouveaux riches). The most famous of these was the new zaibatsu complex of Kaneko Naokichi, whose firms included Suzuki Trading, Kobe Steel, Harima Shipbuilding, Imperial Rayon (Teijin), Japan Flour Milling, Great Japan Celluloid, and Honen* Refining.

¹⁶

The Japanese chemical industry started up during the war almost from scratch after exports from Germany, particularly textile dyes, were cut off.

The effect of the war boom on agriculture was equally profound but much less satisfactory. A significant rise in all price levels accompanied the growth of industry (see Table 7), but most important was the rise in demand for rice by the rapidly urbanizing industrial labor force. The government's policy at the outset of the boom was to allow prices to go up, hoping to increase production in that way. This was also what the politically influential landlords wanted. The landlords were organized into the Imperial Agricultural Association (Teikoku Nokai*), founded in 1910 as the successor to the Great Japan Agricultural Association (Dai Nihon Nokai) of 1881, which began as a quasi-official organization for landlords and was oriented toward rural improvements.

¹⁷

During the war, however, the Teikoku Nokai became more of a pressure group than an agrarian improvement society. Its interests were in rising prices for domestic rice and high tariffs on imports, which profited both landlords and their tenants.

The new industrialists, on the other hand, wanted prices to fall, both to relieve the pressure on them for wage hikes and to maintain industrial peace. Their organization was the Japan Industrial Club (Nihon Kogyo* Kurabu), which held a preliminary meeting in December 1915 and was formally established on March 10, 1917. Its first officers reflected the club's zaibatsu sponsorship: the chairman of the board was Dan Takuma of Mitsui; the chairman of the council was Toyokawa Ryohei* of Mitsubishi; and the managing directors were Nakajima Kumakichi of Furukawa and Go* Seinosuke, formerly of MAC and then chairman of the Tokyo Stock Exchange.