¹ Under the caption of Just Like Old Times, Time magazine recently stated: “The postwar U. S. breakup of Japan's Zaibatsu, the huge and powerful prewar cartels that controlled practically all of Japanese industry, was the most ambitious antitrust action in history. The re-emergence of the Zaibatsu has been hardly less ambitious.” Time, 08 20, 1963Google Scholar. Sec also The Oriental Economist, which argues that “Not only have they (Zaibatsu) survived, but their strength has grown.” The Oriental Economist, xxvii (Tokyo, Jan. 1959), 10.Google Scholar

² Kazusi, Nagasu, Nippon Keisai Nyumon (Introduction to the Japanese Economy) (Tokyo, 1959) p. 118.Google Scholar

³ Many articles and several major works support this view. To list only a few: Sōichiro, Giga, Gendai Nippon no Dokusen Kigyō (Monopolistic Enterprises of Modern Japan) (Tokyo, 1962)Google Scholar; Shigeto, Tsuru, Essays on Japanese Economy (Tokyo, 1958), Chapter 4Google Scholar; and Shigeru, Aihara, ed., Nippon no Dokusen Shihon (Monopolistic Capital of Japan) (Tokyo, 1959).Google Scholar

⁴ Minobe Ryukichi emphasizes (a) in his Sengo Keizai no Saihensei (Reorganization of Postwar Economy) (Tokyo, 1953), pp. 96–99Google Scholar; (b) is stressed by Usami Seijiro in his Nippon no Dokusen Shihon (Monopolistic Capital of Japan) (Tokyo, 1953), p. 17Google Scholar; (c) is mentioned by all those consulted but emphasized most by Hidemasa, Koga, Nippon Kinyu Shihon Ron (The Theory of Japanese Financial Capital) (Tokyo, 1957) p. 87.Google Scholar

⁵ Lockwood, W., The Economic Development of Japan (Princeton University Press, 1954) p. 215.Google Scholar

⁶ Mosaburo, Suzuki, Nippon Dokusen Shihon no Kaibō (Anatomy of the Japanese Monopolistic Capital) (Tokyo, 1935) p. 37Google Scholar. Professor Edwards, describing the extensive financial control of Zaibatsu, found it “beyond comparison in the world.” Edwards, C. D., “The Dissolution of Zaibatsu Combines,” Pacific Affairs, XIX (09 1946).Google Scholar

⁷ Or, in view of the trust-busting measures effected by the Supreme Commander of Allied Powers (S.C.A.P.) immediately following V-J day, we could ask: Did the Zaibatsu which were dissolved by the S.C.A.P. immediately after the Allied Occupation revive?

⁸ Because of a policy to promote bank mergers, adopted in 1927, the four Zaibatsu banks by 1931 jointly had 38.2 per cent of the total national deposits in their banks vis-à-vis 22.1 per cent which they had held in 1926 just before the policy was initiated. This trend continued until the end of World War II. In this sense, the 1944 figures overstate the degree of Zaibatsu bank dominance if we are to consider them as representative prewar figures. Toshihiko, Katō, Nippon Ginkōshi Ron (The History of Japanese Banks) (Tokyo, 1957), pp. 130–211.Google Scholar

⁹ Hiroshi, Higuchi, Zaibatsu no Fukkatsu (The Revival of Zaibatsu) (Tokyo, 1953), pp. 42–45.Google Scholar

¹⁰ The Holding Companies Liquidation Committee (H.C.L.C.) stated that when a Zaibatsu holding company owned at least 10 per cent of a firm, the firm was a subsidiary of the Zaibatsu. Affiliates were those firms 10 per cent or more of whose shares were held by a subsidiary or subsidiaries of the same Zaibatsu. In reality, this minimum requirement was well surpassed. When the Zaibatsu were ordered to report all the firms which they considered under their “absolute control,” these 183 firms were reported by Mitsui to S.C.A.P. as belonging to such a group. The subsidiaries and affiliates of other Zaibatsu de scribed below also were so reported by each Zaibatsu combine.

¹¹ S.C.A.P. decrees on Dissolution of Holding Companies, 12 1945Google Scholar, and on Limitation of Stock-holding and Other Matters, 07 1946Google Scholar. For detail, see Bisson, T. A., Zaibatsu Dissolution in Japan (University of California Press, 1954)Google Scholar, Chapters 5 and 6.

¹² These concentration ratios are in terms of total value shipments in yen by a firm divided by the total value of shipment in a market. For measures of concentration, see Adelman, M., “The Measures of Industrial Concentration,” Review of Economics and Statistics, xxxiii (11 1951) 278.Google Scholar

¹³ Of course these percentages can be significant in terms of possible control, especially when the stock holding is diffused. Also see footnote 38.

¹⁴ Yamato Bank is the former Nomura Bank, which was considered a second-rate (minor) Zaibatsu in prewar years. According to the amount of loans made by this bank, it is not among the ten largest.

¹⁵ Higuchi, , p. 43.Google Scholar

¹⁶ Lockwood, , p. 230.Google Scholar

¹⁷ The case of Jyujo Paper is quite typical. The major reason for this is the acute capital shortage existing since the end of the war. Many firms, including the largest ones, had to borrow from any bank which was willing to lend to meet their investment needs. The shortage became still more acute after the Korean War, when a series of “rationalizations” (gōrika) began.

¹⁸ Giga, , pp. 265–266.Google Scholar

¹⁹ Data for this paragraph and the two following are obtained from Giga, p. 269, and the Misonou data as identified in the source for Table VIII.

²⁰ As of June 1942, the largest shareholders of the Mitsui Bank were: the Mitsui family (475,977 shares), Mitsui Hon-onkai (200,000), and Mitsui Insurance (16,200); i.e., these three owned nearly 67 per cent of the total (one million shares). Higuchi, , p. 43.Google Scholar

²¹ A table in The Oriental Economist which was to show the interlocking shareholding pattern of “the Mitsubishi Group Affiliates” suffers from the same weakness as Giga's work. The cross-classification of mutual shareholding of twenty-four firms, upon further examination, discloses the weakness of the link among these firms rather than the cohesion implied. In clear contrast to the prewar pattern, we find in the table that the largest owner of the Mitsubishi Shoji (trading) is Tokyo Marine and Fire, with 6.95 per cent. But the latter holds, as one of the three largest shareholders, shares in such firms as C. Itoh, Meiden-Sha, and Ataka Sangyo, which are classified as Sumitomo affiliates by Giga and others. We also note that only 3.75 per cent of die total shares of Tokyo Marine and Fire is owned by the Mitsubishi Bank. “Zaibatsu Revival?” The Oriental Economist, XXVI (06 1958) 348–349.Google Scholar

²² Tsuru, , pp. 69–70.Google Scholar

²³ Computed from Giga, , pp. 270–271Google Scholar. The Giga data against which the statement of Professor Tsuru was checked are for 1960, two years after the publication of Professor Tsuru's book.

²⁴ Examining the so-called “proofs” of mutual stockholding among “reviving Zaibatsu firms,” we discover that the standards used by the revivalists are quite subjective and vary considerably from one author to another. No two authors seem to agree upon the degree of financial connection necessary for two firms to be called “financially connected.” There are cases in which a firm is identified as “Mitsui-affiliated” by one author and as “Mitsubishi-affiliated” by another. According to one economist, two giant firms could be considered as financially connected for the purpose of Zaibatsu revival if both of them happen to own a small percentage of the shares (even less than 1 per cent) of a third small firm. Another economist grouped all firms whose largest holders were foreigners and called these firms “foreign Zaibatsu.” Giga, Chapter 6, “Dokusen Kinyūkikan to Dokusenteki Sangyoshihon tono Yugō Yuchaku Kankei no Kyōka” (“Monopolistic Financial Organizations and their Fusion with Industrial Capital”); Teruo, Shimazaki, Nippon no Ginkō (Banks in Japan) (Tokyo, 1961)Google Scholar; Hajime, Yonemura, “Seijyōka Katei ni okeru Keiretsuyūshi no Kentō” (“An Examination of Financial Connection in the Stage of Normalization”), Kosei Torihiki (Tokyo, 1956) pp. 2–14.Google Scholar

²⁵ See for example Higuchi, , pp. 46–53.Google Scholar

²⁶ This is a pet phrase of the revivalists, though never defined.

²⁷ The Oriental Economist, XXVII (06 1959), 414.Google Scholar

²⁸ These examples and the quotation in this paragraph are from Hitoshi, Misonou, “Sengo Dokusen Taikei no Tokushitsu” (“Characteristics of The Postwar Monopolistic Organization”) Keizai Hyoron (Tokyo, 1962), p. 27.Google Scholar

²⁹ These Oriental Economist, XXVII (05 1959), 244Google Scholar. Giga, at one point, admits that “decisions of these presidents' clubs have relatively weaker restrictive power than those of the prewar Zaibatsu Honshu, and it is undeniable that each firm shows a tendency to act on its own” in spite of the fact that he considers the firms represented in these clubs as a unit in a Konzern. Giga, , p. 282.Google Scholar

³⁰ See footnote 12.

³¹ Hitoshi, Misonou, “Sengo Dokusen Keizai no Tokushitsu” (“Certain Characteristics of the Postwar Monopolistic Structure”), Keizai Hyoron (05 1962), p. 24Google Scholar. Original computation by Mr. Misonou.

³² For detail, see footnote 33.

³³ The industries listed here are the ones for which concentration ratios are available between 1937 and 1943. Prewar data are incomplete. The F.T.C. officials who compiled them say that they have used, as their working standard of selecting industries, a 10-firm level ratio of 50 or above, plus a percentage of total output by important industries, such as electricity, cotton cloth, and soy-sauce, 1-, 3-, 5-, and 10-firm levels were selected since the Japanese use such expressions as “Ohte sansha” or “Ohte jyusha” meaning “the main 3” and “the main 10.” Although I have converted the postwar figures to more conventional 4-, 8-, and 10-firm levels, it would have been difficult to convert the above figures.

³⁴ The necessary information was found by comparing the ranking of firms by name in two sources cited for Table XIII.

³⁵ Lockwood, , pp. 221–222.Google Scholar

³⁶ The Asahi Evening News, Tokyo, 03 3, 1962.Google Scholar

³⁷ A recent study by S. P. Florence on the shareholding pattern of the largest English firms provides a useful comparison. The Japanese stockholding pattern, as shown in this article (cf. Table VII), is considerably less concentrated than for the English firms examined by Florence. Florence, S. P., Ownership, Control, and Success of Large Companies, An Analysts of English Industrial Structure and Policy, 1939–1951, (London: Sweet and Maxwell, 1961).Google Scholar

³⁸ In contrast to the U. S. practice, though bankers' ownership of industrial common stocks and the large number and influence of cartels in Japan are to be carefully analyzed, the author ventures an opinion that a markedly similar control mechanism could be observed in view of similarly widespread stock-ownership in both countries. In the case of Japan, “the center of gravity” of control is expected to lean more towards banks, but, vis-à-vis the U. S., it is a question of degree and not kind as it was before the war.

³⁹ This refers to the statements made by high-ranking government officials after the bill titled Tokutei Sangyō Shintō Hō-an (The Promotion of Specified Industries Bill) was withdrawn in July 1963 in the face of opposition by the Fair Trade Commission and the lukewarm support of the industrial and financial leaders. These officials hinted that the course of the policy is to allow easy credit to the export-related, usually large, industries. See Ekonomisuto, (Tokyo, 07 9, 1963) p. 14.Google Scholar

⁴⁰ For example, an attempt to amend the Anti-Monopoly Law in 1958 was unsuccessful because of strong opposition by users of products most affected by cartels which this amendment sought to establish, and the opposition of general consumers. Though the Conservative Party then had the majority in the House, it decided not to bring the bill to a vote.

⁴¹ Some of these so-called affiliated groups, when examined, turn out to be relationships cemented by the participating firms' desire to assure their supply of input or sale of their output. Firm A, a steel firm, for example, becomes an exclusive supplier of benzol to a chemical firm B, which processes it further and then supplies it to a chemical fiber firm C. C., in turn, supplies nylon or filament obtained from it to a large group of “finishers.” Also, it is more likely that each of these firms has supplier and buyer relationships according to its technical or marketing needs. The above happens to be the real case of “affiliates” of the Mitsubishi Chemical, often cited as an important wing of the reviving Mitsubishi Zaibatsu. But the steel company in this case was the Fuji Steel Corporation, which was classified as one of the Fuji combines. Firm B is an “independent” which is not considered an affiliate of any Zaibatsu, and Firm C is usually classified into the Mitsubishi affiliates, although Firm C is not financially controlled by any Mitsubishi affiliates.

⁴² The Economist (London, 09 8, 1962), pp. 907–936.Google Scholar