of a control association for the machine sector, and MCI and the Agriculture Ministry fought over the fertilizer sector. Both of these disputes had to go to the cabinet for settlement. It was only in August 1942 that some 21 control associations covering production and distribution for 15 industries finally came into operation.
The ministries also fought a rearguard action against giving the control associations real authority. Kishi finally broke bureaucratic resistance over this issue by demanding that in return for governmental enforcement powers the control associations appoint full-time presi-
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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 (
) 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
(an abbreviation of
, 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
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Several months passed before the corporation could begin operations; bonds had to be sold, a staff gathered, and clear policies formulated by MCI for its operations. Meanwhile, the war outlook worsened. The battle for Midway was fought in June 1942, and in August American forces began landing on Guadalcanal. One official MITI history notes laconically, 'Japan's true wartime economy began only after Guadalcanal.'
10
In order to prepare for what he feared was coming and in order to get around the stumbling block of the control associations in a future emergency, Kishi arranged for two Imperial ordinances to be issued, neither of which he could fully implement for more than a year. They did not make a great contribution to the war effort, but their influence can still be felt in Japan in terms of the postwar industrial structure. The first was the Enterprise Licensing Ordinance (Kigyo* Kyoka Rei, number 1084 of December 11, 1941), which made it illegal to open a new business without a government license; the second and more important was the Enterprise Readjustment Ordinance (Kigyo Seibi Rei, number 503 of May 13, 1942), which gave the government legal authority to order any enterprise whatever to convert to munitions production.
Kishi and Shiina next concluded that they needed a new control apparatus within MCI to administer the Enterprise Readjustment Ordinance and to supervise the work of the Industrial Facilities Corporation. On June 17, 1942, they created the new Enterprises Bureau, placed it immediately after the General Affairs Bureau in the ministry's internal chain of command, and designated it as the policy center for all industrial reorganization and production-increase activities. The Enterprises Bureau absorbed the existing Promotion Department and the Financial Section of the General Affairs Bureau. It was made responsible for the supply of capital, the internal organization, the management practices, and the efficiency of all Japanese enterprises. Its duties included supervising the Industrial Facilities Corporation, dealing with all questions concerning medium and smaller enterprises, and inspecting and controlling company financial and accounting affairs. The bureau was divided into four sectionsFacilities (Setsubi-ka), Commercial Policy (Shosei-ka*), Industrial Policy (Kosei-ka*), and Finance (Shikin-ka)and it was given authority over all other bureaus in the ministry in order to insure that its programs were executed. The first director was Toyoda Masataka, Shiina's successor as vice-minister after the war and a member of the Diet from 1953 to 1968.
During the second half of 1942 and into 1943 the Enterprises Bureau used its various policy instrumentsthe two ordinances, the
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corporation, and virtually unlimited financial powersto convert one industrial sector after another to war production. Toyoda later recalled that he traveled around the country to explain the new policies and was surprised to find he was none too popular.
11
The industry hardest hit was textiles. Following Enterprises Bureau directives, the Textiles and Machinery bureaus forced the reduction of installed spindles from 12,165,000 in 1937 to only 2,150,000 in February 1946, a decline of 82 percent.
12
Some of this reduction was caused by war damage, but by far the largest proportion came from the conversion of textile mills to airplane and airplane parts production. In 1937 Japan had some 271 textile mills, but only 44 still existed in February 1946. Prior to the war there had been 23 cotton-spinning companies in operation, but forced
