63, No. 1
The main points of this paper are as follows:
(1) In 1930, Commercial and Industrial Trade Associations asked the government to make existing trade rules into laws which would also apply to non-members. This demand came most strongly from Trade Associations which were primarily composed of small and medium-sized businesses. The boom in the Chinese economy since the late 1920s had led to an increase in the number of businesses, especially those of small and medium size; the purpose of the demand was to avoid excessive competition arising as a result.
(2) However, a crisis developed in the Chinese economy in 1931. The trade rules which had obtained legal status were now, ironically, a means to avoid excessive competition between small and medium-sized businesses as they fought to survive. But trade rules which were legally effective could not control excessive competition and the mass production of inferior goods.
(3) During the economic crisis of the 1930s, Trade Associations mainly composed of small and medium-sized businesses sought another method of avoiding excessive competition. They began to ask the government to compel businesses to join Trade Associations and to enact a law to control industrial output. But the Nationalist Government did not accede to their demands easily. It was in the second half of 1936 that the government began to examine a plan to compel all businesses to join Trade Associations in order to stabilize the trade system.
The opinion that the government should support the shipping and shipbuilding industries was widely accepted in the society of those days. At the same time, however, there were various questions related to the development of those industries. The Rishi-Hokyu-Hoan (Bill Relating to Interest-Subsidy for the Shipping Industry) was passed in January 1953, and revised and strengthened that August. In addition, the Ministry of Finance asked banks to postpone the collection of interest on loans to shipping companies, but this lead to increasing opposition to government support of the shipping industry from financial institutions. The Ministry of Finance also criticized the policy of interest-subsidy. Moreover, a bribery case also occurred with relation to Keikaku-Zosen (the shipbuilding program), and social criticism of the shipping industry spread. As a result, in 1954 the amount of interest-subsidy and the size of the shipbuilding program were reduced. Because of this reduction and because of the recession, a lot of shipyards were without new orders. Shipbuilding companies, local communities, and labour unions therefore asked for government support. The government planned to rescue the shipbuilding industry by encouraging exports and these were one factor in the subsequent rapid progress of the Japanese shipbuilding industry. In turn, the development of the shipbuilding industry had an effect on other industries, leading to high economic growth. Thus, the policy for promoting the shipping and shipbuilding industries seems to have come close to the ideal of achieving higher profits for the national economy at a lower cost.
HOSHI was involved in port and railroad construction in Tokyo and the north-east of Japan (Tohoku) in the period after the Sino-Japanese War (1894-1895); HARA worked on harbor and railroad policy in the period after the Russo-Japanese War (1904-1905) and again after World War I. Their infrastructure plans were based on the assumption that the purpose of the economy was to support the military. They expected that economic development would raise the international status of Japan and saw the construction of harbors and railroads as an indispensable part of this. Their plans also attached importance to the role the local economy could play in economic development and strongly recognized the necessity of providing assistance for local economies by expanding the local transportation infrastructure.
HOSHI's efforts failed, except in railroad construction, as a result of financial and political instability, for he worked on each project separately without the advantage of a stable political base during a period of tight financial policy. By contrast, HARA was able to develop his construction plans over the long term since he used his firm political base to secure a structured framework of infrastructure development.
It has been suggested that government attempts to introduce Western-style plowing with draught animals were not welcomed by farmers, but this view is not tenable. On the contrary, the majority of farmers saw this type of plowing as an effective measure of agricultural improvement and therefore responded positively. Moreover, the older and more experienced farmers, those with leadership positions, showed the most enthusiasm, and often played a pioneering role. They also had a deep understanding of the special features which distinguished the new method from plowing by men alone. This led them to point out obstacles to the spread of the new method, such as the small scale of farming units in Japan.