MITI and the Japanese miracle

Page 163

dents, and not just accept, ex officio, the chief executive of the largest enterprise in an industry. This resulted in the Transfer of Administrative Authority Law (number 15 of February 18, 1942) and the Transfer of Administrative Authority Ordinance of January 21, 1943, which made the directors of the control associations quasi-governmental officials and gave the force of law to their orders. Hirao resigned as president of Japan Steel and of the Steel Control Association, and he was replaced in both capacities by Admiral Toyoda (MCI minister from April to July 1941). But in most other control associations the zaibatsu simply arranged for an acceptable figure as president, while they retained true control.

Legally speaking, the control associations were joint public-private corporations modeled after the so-called national policy companies (

kokusaku kaisha

) such as Japan Steel or the South Manchurian Railroador after the "licensed companies" such as Nissan and Toyota. Since the disputes between the self-control and state-control groups had made the mixed public-private corporation an acceptable compromise to both sides, the idea occurred to the frustrated MCI bureaucrats that they might get around the control associations and still not draw the wrath of the business community if they created true public corporations with all capital subscribed by the government and the board of directors appointed by a ministry. Thus was born the

eidan

(an abbreviation of

keiei zaidan

, or "management foundation"). The eidan were not necessarily oriented toward war, and one of them still exists todaythe Teito Rapid Transit Authority (Teito Kosokudo * Kotsu* Eidan), which was created in 1941 as the public segment of the Tokyo subway system; they all came into being as bureaucratic devices to bring a sector of the economy under official control while avoiding the weaknesses and zaibatsu domination of the control associations.

The eidan of greatest interest to us in this work was the Industrial Facilities Corporation (Sangyo* Setsubi Eidan), created by law on November 25, 1941, with Fujihara Ginjiro*, ex-MCI minister and founder of the Oji* Paper Company, as president. It was authorized to purchase or lease idle factoriesparticularly factories that had been idled by orders of MCI's Promotion Departmentand to convert them to munitions production. Funds for these objectives came from corporate bonds, which the eidan could issue up to five times its total capital, with the government guaranteeing the redemption and payment of interest on the bonds. The Industrial Facilities Corporation was, in effect, the operating arm of the Promotion Department for the positive implementation of the enterprise readjustment movement.

⁹