Yoshino and Kaya were in favor of expanded productive capacity, but they also stood for fiscal integrity and joint public-private management, principles that clearly distinguished them from their immediate predecessors.
When fighting broke out in China, the initial view of the cabinet
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was that the conflict should be minimized to the greatest extent possible. This attitude prevailed until approximately the time of the battle for Hsuchow, 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
''relative to' twice in the title, and above all through their insertion of the suffix
* '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
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
(
*
) notes, 'In terms of wartime economic controls, the most
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important administrative change after the outbreak of the China Incident took place outside MCI; this was the establishment on October 23, 1937, of the Cabinet Planning Board (Kikaku-in).'
36
On May 14, 1937, as a preparatory step toward planning and state control, the Hayashi cabinet had reorganized and strengthened the Cabinet Research Bureau of 1935 and renamed it the Cabinet Planning Agency (Kikaku-cho*). When the Konoe government took office in the following month, it decided to merge the military research unit of 1927 (the Resources Bureau) and the Planning Agency into a new and very powerful organ that would, in theory, command and coordinate the activities of the various ministries. This was the Cabinet Planning Board (CPB). It brought together military officers, detached reform bureaucrats, planners from Manchuria, and (unwittingly) some of the leading Marxist economists of the time into what was hailed as the 'economic general staff.' It is directly relevant to the history of MITI for several reasons. First, many MCI officials worked there (or, alternatively, many former CPB officials entered MCI after the war). Second, it was merged in 1943 with MCI to create the Ministry of Munitions. And third, it is the precedent for the postwar Economic Stabilization Board and Economic Planning Agency, both of which MITI has either strongly influenced or dominated. Most important, the CPB's method of planning necessitated the reorganization of MCI into industry-specific bureaus, and these were perpetuated in MITI until 1973.
When first set up, the CPB was divided into six departments: general affairs, domestic plans, financial plans, industrial plans (Uemura Kogoro* was the first head of this department), communications plans, and research. In 1939, after the dismal failure of its first efforts at economic planning, the CPB was reorganized into a secretariat, first department (general policy for the expansion of national strength), second department (overall mobilization), third department (labor and civilian mobilization), fourth department ('materials mobilization plans' and 'expansion of production plans'), fifth department (trade and finance), sixth department (transportation and communications), and seventh department (science and technology). It underwent several more minor changes in later years (the fourth department, for example, was merged with the second department). Prince Konoe named his old professor of law at Kyoto University, Taki Masao, to be the first president of the CPB, but subsequent presidents and vice-presidents were reform bureaucrats or military officers (see Table 9). The CPB's initial staff consisted of 116 career officials, technicians, and temporarily attached specialists.
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TABLE
