MITI and the Japanese miracle

Page 136

was that the conflict should be minimized to the greatest extent possible. This attitude prevailed until approximately the time of the battle for Hsüchow, which fell to the Japanese on May 18, 1938. However, some wartime controls began to appear almost at once. In addition to reinvoking and strengthening the price control ordinance of 1918, the Konoe government obtained passage on September 10, 1937, of three new laws. The first of these legalized enforcement of the Munitions Industries Mobilization Law of 1918, even though no war had been declared. The second was the Emergency Funds Regulation Law (Rinji Shikin Chosei * Ho*), which empowered the Ministry of Finance to direct public and private capital to munitions industries if it felt the normal flow of investment funds was too slow or inadequate. The full implications of this law were not spelled out at the time it was passed, but it inaugurated the Finance Ministry's administrative guidance of private banks, which has continued to the present day.

The third law is the most interesting. It was Yoshino's brainchild and probably his greatest accomplishment as minister. It bore the imposing title of Temporary Measures Law Relating to Exports, Imports, and Other Matters (Yushutsunyu-hin-to* ni kan suru Rinji Sochi ni kan suru Horitsu*, law number 92), and Yoshino and his associates have gleefully recounted how they chose this wording in order to confuse Diet members (specifically, through their use of legalese such as

kan suru

''relative to" twice in the title, and above all through their insertion of the suffix

to

* "et cetera") and how Yoshino dissembled and gave vague answers to questions in the Diet about the scope of the law.

³⁴

Under the terms of this law of only eight articles, the government was authorized to restrict or prohibit the import or export of any commodity and to control the manufacture, distribution, transfer, and consumption of all imported raw materials. It meant, as Nakamura emphasizes, a grant of discretionary power to MCI to control

everything

if it so chose.

³⁵

The 1937 trade law is the clearest precedent for the Foreign Exchange and Foreign Trade Control Law of 1949, which was MITI's single most powerful instrument for carrying out its industrial policy during the period of high-speed growth and into the present (the 1949 law was rewritten but still retained on the books during 1980).

Yoshino and MCI, who clearly had not thought through all the implications of this law, regarded it primarily as an emergency wartime measure. At the same time, however, other segments of the government were moving toward a planned and state-controlled economy. As MITI's semiofficial

History of Commercial and Industrial Policy

(

Shoko

*

seisaku shi

) notes, "In terms of wartime economic controls, the most