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convinced that industrial cartels were using the crisis in order to make huge profits. An atmosphere similar to that at the time of the rice riots gripped the country. Minister Nakasone set up a command post inside MITI that he manned himself with his bureau chiefs and his chiefs of the Paper and Pulp Industry Section in the Consumer Goods Industries Bureau (in charge of toilet paper) and the Chemical Products Section in the Basic Industries Bureau (in charge of detergent). When the taxi drivers went on strike because of a shortage of liquefied petroleum gas, or housewives rioted in Osaka because of a shortage of kerosene, or long lines were discovered in front of supermarkets that allegedly had toilet paper for sale, the MITI leaders tried to send emergency shipments to calm the panic buying. Old industrial policy bureaucrats reared on the slogan that 'steel is the rice of industry' now found themselves preoccupied with consumer goods and irate housewives. The leaders of the ministry, who had begun their careers during the occupation, said that it reminded them of the days of the Economic Stabilization Board, when MCI exercised control over all commodities.
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Out of this confusion came two new laws: the Emergency Measures Law for the Stabilization of the People's Livelihood (Kokumin Seikatsu Antei Kinkyu* Sochi Ho*, number 121 of December 22, 1973) and the Petroleum Supply and Demand Normalization Law (Sekiyu Jukyu* Tekiseika Ho, number 122, also of December 22). They gave MITI broad powers to demand reports from wholesalers and retailers on their supplies, to establish standard prices for designated commodities, to draw up plans for the supply of consumer products, and to fine violators. Nakamura compares the petroleum law specifically with Yoshino's trade control law of September 1937, and Kakuma sees in both 1973 laws a return to at least the time of Sahashi's Special Measures Law.
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In essence the new laws legalized MITI's administrative guidance and formally recognized that administrative guidance was in the national interest. Neither law created a 'third control era,' as some feared they would, but they did begin to tip the balance in Japan from 'self-control' back toward 'state control.'
And yet during 1973, with the country experiencing a 29 percent inflation rate, the question of whether MITI's administrative guidance served the national interest or only the interests of big business remained intensely controversial. It was the Fair Trade Commission that placed this question squarely in the limelight. On October 24, 1972, Prime Minister Tanaka had named a most unusual and independent former bureaucrat, Takahashi Toshihide (chief of the Ministry of Finance's Banking Bureau from April 1963 to June 1965, the period dur-
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ing which the bureau was engaged in constant conflict with Sahashi over the Special Measures Law), as chairman of the Fair Trade Commission. Takahashi simply believed that it was his job to defend the Antimonopoly Law, even though it had been widely ignored in recent years. He was also convinced that the economic events of 1972 and 1973 were related to this flouting of the Antimonopoly Law.
Takahashi could have chosen any of several industries to make his point (steel, for example), but because of the oil crisis he chose the petroleum refining and distribution industry. On November 27, 1973, officials of the Fair Trade Commission raided the offices and demanded to see the books of the Petroleum Association of Japan and of twelve petroleum companies. According to the FTC, ''The on-the-spot inspection was made to investigate a report that the oil companies raised the prices of their products and restricted supplies under the initiative of the association.'
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On February 19, 1974, based on the documents his inspectors had collected, Takahashi charged the association and the companies with operating an illegal price cartel and turned the case over to the Tokyo High Public Prosecutor's Office. This was a sensational developmentTakahashi's picture was on the cover of most national magazines that weekand it became even more sensational when the petroleum companies replied that anything they had done in concert had been in accordance with MITI's administrative guidance.
The prosecutors called in numerous MITI officials, including Iizuka Shiro*, then director of the Basic Industries Bureau and formerly in charge of administrative guidance over the petroleum industry, and questioned them closely about their intentions in administrative guidance, what role the Petroleum Association played in it, and numerous other questions MITI was not pleased to have aired in the newspapers. Vice-Minister Yamashita met the press and angrily denied that MITI condoned illegal acts; he argued that the oil companies' prices would have gone up twice as much if the ministry's administrative guidance had not prevented it. But MITI was definitely on the defensive, and its defense was not helped when, on April 16, 1974, the
printed the names of 50 former MITI officials, including 5 former vice-ministers, who were employed as amakudari executives throughout the oil industry.
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On May 28, 1974, the prosecutors indicted the Petroleum Association, the twelve companies, and seventeen of their executives, charging that they had criminally violated articles 3 and 8 of the Antimonopoly Lawto wit, that between December 1972 and November 1973 the executives had met some five times and concluded illegal
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agreements among themselves to raise prices and withhold products from the market. MITI was not charged, nor was administrative guidance mentioned in the indictment, but the defendants made it clear that both would form the heart of their defense. The executives each faced a maximum penalty of three years in jail or a ?500,000 fine.
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So began the famous 'black cartel' (
) case. According to the press the women of the Housewives' Federation repeatedly shouted 'banzai' on hearing the news of the indictments, but Keidanren was definitely displeased. FTC Chairman Takahashi said that the indictments should serve as a warning to others. MITI indicated that its administrative guidance had been ''betrayed' by the oil companies, and that it planned to review the entire matter for future policy action. In a press conference Vice-Minister Yamashita also said that he hoped Japanese industrialists would not 'lose their motivation' and become 'desperate' as a result of the indictments.
The case was the first criminal prosecution for a violation of the Antimonopoly Law since its enactment, and the first instance of a government official criticizing administrative guidance in the line of duty since the practice had begun. However, more important than the case itselfwhich dragged on in the courts until 1980, when the Tokyo High Court finally ruled that MITI was not authorized to cause companies to restrict production through administrative guidancewas FTC Chairman Takahashi's attempt to strengthen the Antimonopoly Law. On September 18, 1974, the FTC published its proposed revisions, including one giving the FTC power to order companies to desist from cartels and to lower prices (under the AML as it then stood, the commission could only issue warnings). It also proposed strengthening the rules on splitting companies that had achieved near monopoly control over their industries, authorization of prosecutions for price fixing on the basis of circumstantial evidence alone, and several other changes.
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Even though Keidanren and MITI bitterly opposed the AML revision, the FTC case was given a boost when in November a scandal broke over Prime Minister Tanaka's expenditures of
